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2022 (1) TMI 807 - AT - Central ExciseEntitlement of interest on delayed refund of pre-deposit - appellant submitted that since the appellant is entitled to refund of pre-deposit, from the date of deposit till the date of its realisation under Section 35FF of Central Excise Act - HELD THAT - Division Bench of this Tribunal in M/S. PARLE AGRO PVT. LTD. VERSUS COMMISSIONER, CENTRAL GOODS SERVICE TAX, NOIDA (VICE-VERSA) 2021 (5) TMI 870 - CESTAT ALLAHABAD , wherein interest on pre-deposit (made during investigation) have been enhanced from 6% to 12%, following the ruling of the Apex Court in SANDVIK ASIA LIMITED VERSUS COMMISSIONER OF INCOME-TAX AND OTHERS 2006 (1) TMI 55 - SUPREME COURT . The impugned order is set aside. The Adjudicating Authority is directed to grant interest @ 12% per annum from the date of deposit till the date of refund. Such interest should be granted within a period of two months from the date of receipt or service of the copy of this order - appeal allowed - decided in favor of appellant.
Issues:
1. Wrong availment of cenvat credit and duty demand during specific financial years. 2. Appeal against the demand and subsequent orders by lower authorities. 3. Refund claim filed by the appellant. 4. Dispute regarding the grant of interest on the refund amount. Analysis: 1. The appellant, engaged in the manufacture of Kraft Paper, faced audit objections regarding the incorrect availment of cenvat credit and duty demand totaling specific amounts during the financial years 2008-09, 2009-10, and April 2010. A show cause notice was issued, leading to a confirmation of demand by the lower authority. The Commissioner (Appeals) directed a pre-deposit of 30% of the duty involved, which was complied with. Subsequent appeals and remands followed, resulting in the final order by the Tribunal setting aside a portion of the demand while remanding the matter related to cenvat credit on iron and steel items to the Commissioner (Appeals). 2. Following the successful appeal before the Tribunal, the appellant filed a refund claim, which was allowed by the Adjudicating Authority. However, the issue arose when the Adjudicating Authority did not grant interest on the refund amount from the date of deposit till the finalization of the appeal. The Commissioner (Appeals) rejected the claim for interest, leading to the present appeal on this specific matter. 3. During the proceedings, the appellant argued for the entitlement to interest on the refund of the pre-deposit amount from the date of deposit till its realization under Section 35FF of the Act. The Authorised Representative for the Revenue relied on the impugned order, contesting the appellant's claim for interest on the refund amount. 4. The Tribunal, in its judgment, referred to a previous ruling and directed the Adjudicating Authority to grant interest at a rate of 12% per annum on the refund amount from the date of deposit till the date of refund. This decision was based on a Division Bench ruling and the Apex Court's decision in a relevant case. The Tribunal set aside the impugned order and instructed the Adjudicating Authority to ensure the grant of interest within a specific timeframe, ultimately allowing the appeal in favor of the appellant. In conclusion, the Tribunal's decision in this case revolved around the grant of interest on the refund amount, with a specific directive to the Adjudicating Authority to comply with the prescribed interest rate and timeline for the interest payment.
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