Appeal allowed, order set aside. Interest granted at 12% per annum from deposit date. Refund interest due within 60 days.

The Tribunal allowed the appeal, setting aside the order and directing the Adjudicating Authority to grant interest at a rate of 12% per annum from the date of deposit (31.03.2006) until the date of refund. The interest on the refund was to be paid within 60 days from the receipt or service of the Tribunal's order.

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Issues Involved:
1. Entitlement to interest on delayed refund from the date of deposit until the refund of the pre-deposit of the principal amount.

Detailed Analysis:

1. Entitlement to Interest on Delayed Refund:
The appellant contested the denial of interest on the delayed refund of the pre-deposit amount. The core argument revolved around the interpretation of Sections 11B, 11BB, 35F, and 35FF of the Central Excise Act. The appellant deposited the amount under protest on 31.03.2006 and sought a refund after the High Court's favorable decision on 25.01.2018. The refund of the principal amount was granted within three months from the date of application, but the claim for interest was rejected.

The appellant argued that the amount deposited under protest should be considered as a pre-deposit under Section 35F, and thus, interest should be payable from the date of deposit until the date of refund. The appellant relied on the Supreme Court's decision in Sandvik Asia Limited, which established the principle that interest should be paid on delayed refunds to compensate for the financial loss suffered due to the revenue's retention of the amount.

The respondent countered that the refund was granted within three months from the application date, and thus, no interest was payable under Section 35FF as it existed prior to 06.08.2014. They argued that the Sandvik Asia Limited case was not applicable as it pertained to the Income Tax Act, and the delay in that case was significantly longer.

The Tribunal analyzed the provisions of the Central Excise Act and the Income Tax Act, noting that both statutes had similar provisions regarding interest on delayed refunds. The Tribunal emphasized that the principle laid down in Sandvik Asia Limited was applicable as it was the law of the land under Article 141 of the Constitution of India.

The Tribunal also referenced its previous decisions and the rulings of various High Courts, which consistently held that interest on delayed refunds should be granted from the date of deposit until the date of refund. The Tribunal concluded that the appellant was entitled to interest at the rate of 12% per annum, following the precedent set by the Supreme Court and other judicial authorities.

Conclusion:
The Tribunal allowed the appeal, set aside the impugned order, and directed the Adjudicating Authority to grant interest from the date of deposit (31.03.2006) until the date of refund at the rate of 12% per annum. The interest on the refund was to be granted within 60 days from the receipt or service of the Tribunal's order.

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