Pre-deposit refund interest under old section 35FF depends on delay beyond three months after appellate order communication.

Interest on a pre-deposit made before the 2014 substitution of section 35FF of the Central Excise Act was governed by the earlier provision, which allowed interest only if the refundable amount was not returned within three months from communication of the appellate order to the adjudicating authority. The substituted provision, granting interest from the date of deposit until refund, was expressly made subject to the proviso preserving the earlier regime for amounts deposited before the Finance (No. 2) Act, 2014. As the refund was sanctioned within the three-month period, no interest was payable on the pre-deposit.

---

---

Issues: Whether interest was payable on the refund of pre-deposit deposited prior to the 2014 amendment of section 35FF of the Central Excise Act, 1944, when the refund was sanctioned within three months of communication of the appellate order.

Analysis: The amount in question was a pre-deposit made in 2006. Section 35FF, as it stood before its substitution with effect from 06.08.2014, granted interest only where the refundable amount was not refunded within three months from the date of communication of the appellate order to the adjudicating authority. The substituted provision, which provides interest from the date of deposit till refund, was made subject to the proviso that amounts deposited prior to the commencement of the Finance (No. 2) Act, 2014 would continue to be governed by the earlier provision. Since the refund was sanctioned within the prescribed three-month period, the pre-amendment provision did not entitle the assessee to interest.

Conclusion: Interest on the pre-deposit was not payable, and the assessee's challenge failed.

---