Tribunal rules in favor of appellant, grants 12% interest, citing Parle Agro & Sandvik Asia.

The Tribunal ruled in favor of the appellant, allowing the appeal and granting interest at 12% p.a. from the deposit or cheque encashment date till the refund date. This decision aligned with precedents set by the Parle Agro Limited case and the Supreme Court's ruling in Sandvik Asia Ltd. The Adjudicating Authority was directed to promptly disburse the remaining interest within 45 days.

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Issues involved:
Entitlement to interest on amount collected under protest during investigation under Section 35FF of the Central Excise Act.

Detailed Analysis:

1. Issue of Entitlement to Interest on Amount Collected Under Protest:
The appellant, engaged in fabricating and installing Retail Visual Insignia (RVI), paid Rs. 50 lakhs under protest during investigation. The appellant contended that their activity did not fall under Central Excise provisions. Despite the payment, they reserved the right to contest the issue on merit. The show cause notice proposed a demand of over Rs. 6 crores, including the amount deposited during investigation. The appellant succeeded in appeals before the Tribunal, leading to a refund application. While the principal amount was refunded, the appellant sought interest under Section 35FF of the Central Excise Act, citing the Parle Agro Limited case. The Adjudicating Authority granted interest from the date of filing the appeal but calculated it based on a pre-deposit amount of 7.5% of the demand.

2. Calculation of Interest and Cross Appeal:
A cross-appeal was filed before the Commissioner (Appeals) challenging the interest calculation. The Tribunal's stay order confirmed the Rs. 50 lakhs deposit as sufficient for appeal admission. The Commissioner (Appeals) noted that interest on delayed refund should be at 6% p.a. The appellant received interest at 6% p.a. based on judicial pronouncements and circulars. The Commissioner (Appeals) ordered a recalculation of interest following these observations.

3. Appellant's Contentions and Tribunal's Decision:
The appellant argued for interest from the deposit date till refund, citing the Parle Agro Limited case for 12% p.a. interest. The appellant contested the Commissioner (Appeals) decision of 6% p.a. interest. After considering the contentions, the Tribunal ruled in favor of the appellant. It held that interest should be granted from the deposit or cheque encashment date till the refund date at 12% p.a., aligning with the Parle Agro Limited case and the Supreme Court's ruling in Sandvik Asia Ltd. The Tribunal directed the Adjudicating Authority to pay the balance interest within 45 days.

In conclusion, the Tribunal allowed the appeal, emphasizing the appellant's entitlement to interest at 12% p.a. from the deposit or cheque encashment date till the refund date. The decision aligned with precedents set by the Parle Agro Limited case and the Supreme Court's ruling in Sandvik Asia Ltd., directing the Adjudicating Authority to disburse the remaining interest promptly.

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