Appellant wins refund appeal, entitled to interest under Section 35FF.

The Tribunal allowed the appellant's appeal against the demand confirmation related to reversed cenvat credit under protest. Subsequently, the Commissioner (Appeals) granted the appellant's refund claims, ruling out undue enrichment and entitling the appellant to a refund. The Tribunal held that the appellant should receive interest on the refund from the date of deposit till realization under Section 35FF. Citing legal precedents, the Tribunal clarified that interest should be granted under Section 35FF, not Section 11BB, and directed the Adjudicating Authority to pay interest at 12% per annum within two months of the order's receipt.

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Issues:
1. Cenvat credit reversal under protest and subsequent demand confirmation.
2. Appeal against the refund transfer to Consumer Welfare Fund.
3. Appeal for interest on refund from the date of deposit till realization.
4. Applicability of Section 35FF for interest on the reversed cenvat credit.
5. Legal precedent references for supporting the appeal.

Analysis:
1. The appellant, engaged in the manufacture of V. P. Sugar & Molasses, faced objections from the Department regarding the cenvat credit amounting to Rs. 77,95,735/- reversed under protest. This led to a show cause notice and subsequent demand confirmation by the Commissioner. The Tribunal allowed the appeal against this demand on 21.10.2019.

2. Post the Tribunal's decision, the appellant filed refund claims which were initially transferred to the Consumer Welfare Fund by the Adjudicating Authority. The Commissioner (Appeals) later allowed the refund claims, stating that undue enrichment did not apply, and the appellant was entitled to a refund. However, the appellant was not granted interest post three months from the date of filing the refund claims.

3. The appellant challenged the lack of interest on the refund from the date of deposit till realization before the Tribunal. The Department argued against this claim. The Tribunal noted that the reversed cenvat credit amount should be treated as a deposit, entitling the appellant to interest from the date of debit till realization under Section 35FF.

4. The appellant's counsel cited various legal precedents supporting the entitlement to interest on delayed refunds, emphasizing the delay in the grant of the refund as a crucial factor. The Tribunal, after considering the arguments, found a mistake of law in the impugned order-in-appeal dated 28.08.2020, clarifying that interest should be granted under Section 35FF, not Section 11BB.

5. Relying on the Division Bench's decision in Parle Agro (P) Ltd. vs. Commissioner, CGST, the Tribunal set aside the order and directed the Adjudicating Authority to grant interest at 12% per annum from the date of deposit till the date of refund. The Tribunal allowed both appeals, emphasizing the need for prompt payment of the directed interest within two months of the order's receipt or service.

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