Pre-deposit treated as refundable appellate deposit; refund could not be denied as time barred after the underlying order was set aside.

Refund was held payable where an amount deposited during the pendency of appeal was made in relation to appellate proceedings and, after the earlier denial of Modvat credit was set aside, became consequential relief. The payment was treated on the same footing as a pre-deposit under Section 35F of the Central Excise Act, 1944, not as an independent voluntary payment. On that basis, the refund claim could not be rejected as time barred, and the limitation objection was rejected.

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Issues: Whether the assessee was entitled to refund of the amount paid during the pendency of the appeal after the earlier order was set aside, and whether such refund claim could be rejected as time barred.

Analysis: Once the earlier denial of Modvat credit was reversed, the assessee became entitled to consequential refund relief. The payment made pending appeal was treated as a deposit made in relation to the appellate proceedings and, by its character, stood on the same footing as a pre-deposit under Section 35F of the Central Excise Act, 1944. Such payment could not be treated as an independent voluntary payment so as to attract the limitation applicable to a refund claim. The claim for refund therefore could not be rejected on the ground of time bar.

Conclusion: The assessee was entitled to refund, and the Revenue's objection based on limitation was rejected.

Ratio Decidendi: Amount paid as a pre-deposit or as payment pending appeal, when the underlying order is set aside, is refundable as consequential relief and cannot be denied as time barred on the ground that it was voluntarily paid.

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