Appeal allowed, appellants entitled to interest on delayed refund.

The Member (Judicial) allowed the appeal, ruling in favor of the appellants. It was determined that the refund of the pre-deposit amount should have been granted within 3 months from the Tribunal's order. The delay in processing the refund was noted, and the appellants were deemed entitled to interest on the refund. The impugned order was set aside, and the appellants were granted interest from a specified date to another date at the prescribed rate under the law.

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Issues:
Classification of goods under different sub-headings, demand for differential duty, refund of pre-deposit amount, entitlement to interest on refund.

Classification of Goods:
The case involved the classification of goods manufactured by the appellants under different sub-headings. The department changed the classification of certain products retrospectively, leading to a demand for differential duty from the appellants. The matter was initially approved by the department but later contested by changing the classification, resulting in a demand for differential duty.

Refund of Pre-deposit:
The appellants were granted a stay on the condition of pre-deposit of a significant amount pending the disposal of the appeal. After the appeal was disposed of by CESTAT, it was decided that the products would fall under a different sub-heading, and the matter was remitted back to the adjudicating authority to re-determine the demand, if any. The delay in processing the refund of the pre-deposit amount led to a dispute regarding the entitlement to interest on the refund.

Entitlement to Interest on Refund:
The appellant contended that the refund of the pre-deposit amount was matured immediately after 3 months from the Tribunal's order settling the classification issue. The appellant argued that the adjudicating authority should have granted the refund immediately after 3 months from the date of the Tribunal's order, as the delay of 5 years was unjustified. The appellant claimed entitlement to interest on the refund, which was disputed by the lower authorities based on the timing of the refund application.

Judgment:
The Member (Judicial) carefully considered the submissions from both sides. It was established that in the case of pre-deposit, the refund arises and is payable within 3 months from the date of the Tribunal's order. The delay in passing the order on remand by the Tribunal was noted, and it was emphasized that the adjudicating authority should have acted promptly. The Member concluded that the entire pre-deposit amount was refundable to the appellant within 3 months from the Tribunal's order, and the appellant was entitled to interest on the refund. Citing relevant decisions, the Member set aside the impugned order and allowed the appeal, granting the appellants interest from a specified date to another date as per the prescribed rate under the law.

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