2022 (8) TMI 926 - AT - Central Excise

Allowance of proper interest under Section 35FF of Central Excise Act - HELD THAT - Division Bench of this Tribunal in Parle Agro Limited 2021 (5) TMI 870 - CESTAT ALLAHABAD , wherein the amount was deposited during the stage of investigation/audit, this Tribunal have held that on being successful in appeal, interest is allowable under Section 35FF from the date of deposit till the date of refund. Further, following the ruling of the Apex Court in the case Sandvik Asia Ltd. 2006 (1) TMI 55 - SUPREME COURT , it has been held that interest shall be payable @ 12% p.a. Further, Single Member Bench of this Tribunal in the case of Riba Textiles Ltd vs. CCE S.T., 2020 (2) TMI 602 - CESTAT CHANDIGARH have also granted interest @ 12% p.a. under Section 35FF. The impugned order(s) modified to the effect that the appellant shall be entitled to interest under Section 35 FF @ of 12% p.a. from the date of deposit till the date of grant of refund - the Adjudicating Authority is directed to grant the balance amount of interest as modified herein within 45 days of receipt or service of this order. Appeal allowed.

Summary

Issues involved:
Allowance of proper interest under Section 35FF of Central Excise Act.

Analysis:

Issue 1: Proper interest under Section 35FF
The case involved the demand of Central Excise duty, subsequent challenges, and refund claims with interest. The Tribunal allowed the appeal and set aside the impugned order-in-original, leading to appeals by the revenue before the High Court and Supreme Court. The appellant claimed refund of the pre-deposit amount with interest. The Adjudicating Authority granted the refund but denied the interest claim. The Commissioner (Appeals) allowed interest under Section 35FF, stating it was payable as per the provision existing before 06/08/2014. The appellant argued for interest from the date of deposit till refund at 12% p.a., citing relevant case laws. The Tribunal found in favor of the appellant, citing precedents where interest was granted at 12% p.a. from the date of deposit till refund. The Tribunal allowed the appeals and directed the Adjudicating Authority to grant the balance interest within 45 days.

Conclusion:
The Tribunal ruled in favor of the appellant, allowing interest under Section 35FF at 12% p.a. from the date of deposit till the refund date. The decision was based on precedents and the provisions of the Central Excise Act.