Tribunal Grants 12% Interest on Deposit Under Protest, Appellants Prevail

The Tribunal allowed the appeals in favor of the appellants, granting them interest at a rate of 12% per annum on the amount deposited under protest during the investigation. The Tribunal determined that the amount paid under pressure during the investigation qualified as a deposit under protest, entitling the appellants to the interest claimed. Various case laws and the Tribunal's recent decision supported this outcome, leading to the appellants' successful claim for interest on the deposited amount.

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Issues:
- Admissibility of interest on the amount deposited under protest during investigation

Analysis:
1. The case involved a dispute regarding the admissibility of interest on the amount deposited under protest during an investigation to avail the benefit of duty free clearances under SSI exemption Notification No. 8/2003-CE. The appellants contended that interest should be paid on the amount deposited from the date of deposit till the date of refund at a rate of 12% per annum, citing various judgments supporting their claim.

2. The appellants argued that the amount deposited under protest during the investigation should be considered as a deposit under protest, entitling them to interest. They relied on judgments such as C.C.E. Coimbatore vs. Pricol Ltd. and C.C.E. Lucknow vs. Eveready Industries India Ltd., which supported the principle that any amount deposited during the pendency of adjudication proceedings or investigation is in the nature of a deposit under protest. They also cited decisions by the Hon'ble Madras High Court and other tribunals to strengthen their argument.

3. On the other hand, the respondent opposed the appellants' claim, arguing that the amount paid during adjudication was a pre-deposit, not a deposit under protest. They referred to the decision of the Hon'ble Apex Court in CCE Hyderabad vs. ITC Ltd., stating that interest on delayed refund is payable after three months from the date of the final adjudication order. The respondent also relied on the decision of the Hon'ble Delhi High Court in Nino Chaks Pvt Ltd vs. CC (Gen), emphasizing that claiming interest from the date of payment during the investigation is not sustainable.

4. After considering the arguments and case laws presented by both parties, the Tribunal analyzed the nature of the amount deposited during the investigation. The Tribunal found that the amount paid under pressure during the investigation was indeed under protest, entitling the appellants to interest. Citing various judgments and the latest decision of the Tribunal in M/s Jovex International, the Tribunal held that the appellants were entitled to interest at a rate of 12% per annum from the date of deposit till the realization of the refund.

5. Consequently, the appeals were allowed in favor of the appellants, granting them the interest on the amount deposited under protest during the investigation.

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