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TMI Blog2024 (5) TMI 558X X X X Extracts X X X X X X X X Extracts X X X X ..... e grant of interest on the refund of pre-deposit is consequential. However, the rate of interest cannot be arbitrarily fixed by the Tribunal and interest is to be given at the rate prescribed under the statute as held by the Hon ble Apex Court in the case of UNION OF INDIA ORS. VERSUS M/S. WILLOWOOD CHEMICALS PVT. LTD. ANR. AND UNION OF INDIA ORS. VERSUS M/S. SARAF NATURAL STONE ANR. [ 2022 (4) TMI 980 - SUPREME COURT] which was followed by the Tribunal in the case of BOCHASANWASI SHRI AKSHARPURUSHOTTAM SWAMINARAYAN SANSTH VERSUS C.C. -AHMEDABAD [ 2021 (11) TMI 759 - CESTAT AHMEDABAD] . In view of the above, the refund of pre-deposit is governed by the Section 35FF of Central Excise Act 1944 and the rate of interest is governed by the statutory provisions and the notifications issued in this regard from time to time. The appellants are entitled for the payment of interest as per the provisions of Section 35FF and at the rate prescribed therein. The appeal is allowed. - HON BLE Mr. P. ANJANI KUMAR , MEMBER ( TECHNICAL ) Ms Anushka Rastogi , Advocate for the Appellant Shri V R Pavan Kumar , Authorised Representative for the Respondent ORDER [ ORDER PER : P. ANJANI KUMAR ] The appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ] (vi) G.S. Promoters and Developers [2018 (15) GSTL 59 (Tri- LB)] (vii) Kali Aerated Water Works [2023 (383) ELT 413 (Mad)] 5. Heard both sides and perused the records of the case. 6. Brief issue involved in the case is whether the appellants are entitled to the interest on the pre-deposit paid under Section 35FF of Central Excise Act, 1944 or under the provisions of Section 11B. The appellant claims that refund order did not specify any interest to be paid to the appellants when the refund was sanctioned consequent to the order passed by the Tribunal. For ease of reference the provisions of Section 35FF are reproduced as under: Before enactment of Finance Act, 2014 - 35FF. Where an amount deposited by the appellant in pursuance of an order passed by the Commissioner (Appeals) or the Appellate Tribunal (hereinafter referred to as the appellate authority), under the first proviso to Section 35F, is required to be refunded consequent upon the order of the appellate authority and such amount is not refunded within three months from the date of communication of such order to the adjudicating authority, unless the operation of the order of the appellate authority is stayed by a superio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Jamnagar, reported as 2010 (260) E.L.T 274 (Tri. Ahmd.) has held that any amount deposited pursuant to the court orders has to be treated as the amount of pre deposit. Law with respect to the amount deposited during investigation is also clear that the said amount acquires the nature of the amount of pre deposit. 5.5 These observations when seen in the light of above quoted legal provisions, it is clear that Section 11B/11BB of Central Excise Act is not applicable to the given set of circumstances. We draw our support from the decision of this Tribunal in the case of M/s. Parle Agro Pvt. Ltd. Vs. Commissioner, GST, reported as 2021-TIOL-306-CESTAT-ALL, wherein following findings have been endorsed: 30. In the present case, the provisions of section 11B of the Excise Act would not be applicable. This is for the reason that the appellant was not claiming refund of duty. The applicant, as noticed above, had claimed refund of the revenue deposit. Such a finding has also been clearly recorded by the Tribunal in the order dated 31.01.2017, which order has attained finality. 31. Section 11D of the Excise Act deals with duties of excise collected from the buyer to be deposited with Centr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 08.12.2004 was also being considered by the Apex Court in the above mentioned judgment dated 08.04 2015. In that circular the Board emphasised that the amounts other than the amount of duty if deposited it should be refunded immediately as nonreturning of deposits attract interest that has been granted by the Courts in number of cases. One similar case of Hon'ble Apex Court is the decision of Sandvik Asia Ltd. reported as 2006 (196) ELT 257 (SC) wherein it was held that the amount deposited under Section 35FF of Central Excise Act as far as the payment of interest is concerned shall be applicable only in the cases for such deposits as have been made under Section 35F of the Act. As already observed in the present case, the amount in question is neither the amount of duty nor is the amount of pre deposit, the amount in question is merely a deposit with the Revenue which the Revenue had no authority to retain as the appellant was the owner thereof. The following para of the above circular are quoted in this decision. 5. Refund of pre-deposit: 5.1 Where the appeal is decided in favour of the party / assessee, he shall be entitled to refund of the amount deposited along with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se Act, 1944 or section 129E of the Customs Act, 1962 should be maintained by the Commissionerate so as to facilitate seamless verification of the deposits at the time of processing the refund claims made in case of favourable order from the Appellate Authority. 5.8 From the above discussion, once it is clear that Section 11B and 11BB of Central Excise Act will not be applicable to the amount in question, the denial of the interest on the appellant s amount is held to be unjustified. As per the Article 300A of Constitution of India also, no person shall be deprived of his property, save by authority of law. Once confiscation order about impugned currency is set aside, it becomes clear that the seized currency continues to be the appellant's property. He cannot be deprived of the same and is entitled for benefits arising out of said property. Hence interest accrued on the amount in question during the period it was in fixed deposit is the property of the owner of the amount i.e. the appellant herein. We draw our support from the decision of Hon'ble High Court of Allahabad in the case of RHL Profiles Ltd. Vs. Commissioner of Customs, Ex. and Service Tax, Kanpur reported as 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... till the entire outstanding is paid. But when it comes to granting of interest on refund of taxes, the refunds are first adjusted towards the taxes and then the balance towards interest. Hence as per the stand that the Department takes they are liable to pay interest only upto the date of refund of tax while they take the benefit of assesses funds by delaying the payment of interest on refunds without incurring any further liability to pay interest. This stand taken by the respondents is discriminatory in nature and thereby causing great prejudice to the lakhs and lakhs of assesses. Very large number of assesses are adversely affected inasmuch as the Income Tax Department can now simply refuse to pay to the assesses amounts of interest lawfully and admittedly due to that as has happened in the instant case. It is a case of the appellant as set out above in the instant case for the assessment year 1978-79, it has been deprived of an amount of 40 lakhs for no fault of its own and exclusively because of the admittedly unlawful actions of the Income Tax Department for periods ranging up to 17 years without any compensation whatsoever from the Department. Such actions and consequences, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purpose of said section. (iii) The Notification No. 68/2003-CE dated 12.09.2003 issued under Section 11DD vide which the rate of interest fixed by the Central Government is at 15% per annum for the purpose of the said section. (iv) The Notification No. 6/2011 dated 01.03.0211 under Section 11AB wherein Central Government has fixed the rate of interest at 18% per annum for the purpose of the said section. From the above notifications, issued under the respective sections of the Act, it becomes clear that the rate of interest varies from 6% to 18%. 5.12 This Tribunal in the case of M/s. Parle Agro Pvt. Ltd. Vs. Commissioner, Central Goods Service Tax, Noida (viceVersa) reported as 2021 (5) TMI 870 CESTAT ALLHABAD has held that in the light of the above discussed notifications the grant of interest at the rate of 12% per annum seems to be appropriate. The decision of Hon ble Apex Court in the case of Sandvik Asia Ltd. (supra) has also been relied upon. Hon ble High Court of Kerala also in the case of Sony Pictures Networks India Pvt. Ltd. (supra) has held that the interest on the refund shall be payable at the rate of 12% per annum. The previous judgment of Hon ble Apex Court in ..... 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