Delayed refund of pre-deposit attracts interest where refund is not made within the prescribed period.

Delayed refund of a pre-deposit after disposal of the appeal in favour of the assessee was treated as attracting interest under the Board circular, which required refund within three months and contemplated interest for default. The analysis notes that the Tribunal relied on a coordinate decision following the Supreme Court's ITC ruling on interest for delayed refund of pre-deposit. On that basis, the delay in refund was held to give rise to interest liability, and the matter was resolved in favour of the assessee.

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Issues: Whether interest was payable on delayed refund of the pre-deposit amount beyond the period prescribed in the Board circular.

Analysis: The appellants had succeeded in the earlier appeal and the pre-deposit was refunded after the stipulated period of three months. The Board circular directed refund of pre-deposit within three months from the date of disposal of the appeal in favour of the assessee and contemplated interest liability for default. The Tribunal also noted that a coordinate decision had allowed interest on delayed refund of pre-deposit by relying on the Supreme Court decision in ITC. Applying that position, the delay in refund attracted interest liability.

Conclusion: Interest on the delayed refund of the pre-deposit was payable and the appeal was allowed in favour of the assessee.

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