2023 (3) TMI 1125 - HC - Central Excise

Interest on pre-deposit amount - amount deposited by the petitioner to avail its right of appeal under Section 35FF of the Central Excise Act, 1944 read with Section 83 of the Finance Act, 1994 - Petitioner s request for interest on pre-deposit for the period 15.09.2009 till 20.09.2016 was rejected - HELD THAT - It is the respondents case that since the petitioner is aggrieved by the order of the Adjudicating Authority limiting the refund to the amount of pre-deposit, the appropriate remedy for the petitioner is to file an appeal against the said order. It is also emphasized that the Adjudicating Authority would now have no powers to review its own orders and therefore, it does not have jurisdiction to entertain the petitioner s request for reconsidering payment of interest. Notwithstanding the petitioner may have a right to appeal against the order refunding the principal amount while ignoring the interest thereon; it is not deemed necessary to relegate the petitioner to avail such remedy considering that there is no dispute that the petitioner would be entitled to interest on the said amount - According to the petitioner a sum of ₹24,50,959/- is due and payable to the petitioner on account of interest on the pre-deposit. It is considered apposite to set aside the communication issued by respondent rejecting the petitioner s request for interest and direct the Adjudicating Authority to entertain its request for interest on the pre-deposit amount on merits and disburse the said amount as calculated - petition allowed.

Summary

Issues involved:
The judgment addresses the petitioner's request for interest on a pre-deposit made for filing an appeal under Section 35FF of the Central Excise Act, 1944.

Controversy and Details:
The petitioner, a Limited Liability Partnership (LLP) engaged in management consultancy services, filed an appeal before the Customs Excise and Service tax Appellate Tribunal (CESTAT) against a service tax order. To maintain the appeal, the petitioner deposited Rs. 1,00,00,000 with the respondents. The appeal was successful, and the deposited amount was refundable. The respondents had also appealed against the CESTAT decision, which was dismissed by the Court. The petitioner's appeal against the CESTAT decision was rejected, and the respondent's appeal is pending before the Supreme Court.

Entitlement to Interest:
The judgment notes that the petitioner is entitled to interest on the deposited amount beyond three months from the date of the CESTAT's order. Although the principal amount has been refunded to the petitioner, no interest has been paid. The respondents argued that the petitioner should appeal against the Adjudicating Authority's decision limiting the refund to the principal amount, but the Court found it unnecessary to do so. The petitioner claimed Rs. 24,50,959 as interest due on the pre-deposit.

Decision and Order:
The Court set aside the communication rejecting the petitioner's interest request and directed the Adjudicating Authority to consider the interest claim on the pre-deposit amount and disburse the calculated amount. The petition was allowed in favor of the petitioner.