Tribunal grants appeal for 12% interest under Section 35FF, overruling Section 11BB. Precedents cited.

The Tribunal allowed the appeal, ruling that the appellant is entitled to interest under Section 35FF at a rate of 12% per annum on the pre-deposit amount made. The Tribunal emphasized the correct application of Section 35FF over Section 11BB, citing relevant precedents to support the appellant's claim for interest. The impugned order was set aside, directing the adjudicating authority to grant the interest within 45 days from the date of the Tribunal's order.

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Issues:
1. Entitlement to interest under Section 35FF for pre-deposit amount.
2. Interpretation of provisions regarding interest payment.
3. Applicability of Section 11BB versus Section 35FF.
4. Precedents on interest payment in similar cases.

Analysis:
The appeal in this case revolves around the question of whether the appellant is entitled to interest under Section 35FF for the pre-deposit amount made as per the stay order of the Tribunal. The appellant had deposited the duty amount of Rs. 19,26,211/- based on the stay order, and later succeeded in the appeal. The appellant then sought a refund of this pre-deposit amount with interest. The Commissioner (Appeals) denied the interest payment, citing Section 11BB, which mandates interest if the refund is not paid within three months of application. However, the appellant argued that Section 35FF of the Central Excise Act governs the interest payment in this case, providing for interest on the pre-deposit amount from the date of payment till the date of refund.

The appellant contended that interest under Section 35FF is a form of compensation for the financial loss suffered due to the illegal or unauthorized collection of revenue by the authorities. Citing the Supreme Court's ruling in Sandvik Asia Ltd. case, the appellant argued that interest should be paid at a rate of 12% from the date of deposit till the date of refund. Additionally, a Division Bench of the Tribunal in a recent case, Parle Agro Pvt. Ltd., also upheld the payment of interest at 12% in similar circumstances, further supporting the appellant's claim for interest under Section 35FF.

On the other hand, the Departmental Representative relied on the impugned order and cited precedents such as the Hindustan Agro Insecticides case and the Riba Textile Ltd. case to support the denial of interest payment. However, the Tribunal found that the Commissioner (Appeals) erred in referring to Section 11BB instead of Section 35FF. Relying on the Supreme Court's ruling in Sandvik Asia Ltd. and CCE Vs. ITC Ltd., the Tribunal held that the appellant is indeed entitled to interest at a rate of 12% per annum from the date of deposit till the date of refund. The Tribunal set aside the impugned order and directed the adjudicating authority to grant the interest within 45 days from the date of receipt of the order.

In conclusion, the Tribunal allowed the appeal, emphasizing the correct application of Section 35FF for interest payment on the pre-deposit amount made by the appellant. The judgment underscores the importance of following legal provisions accurately and adhering to established precedents in determining entitlement to interest in such cases.

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