Builder wins interest refund appeal at Tribunal, entitled to 12% per annum.

The Tribunal ruled in favor of the appellant, a builder, in a case concerning interest on a deposit made during an investigation under protest. The appellant successfully appealed against a confirmed demand and sought a refund of the deposited amount with interest. The Tribunal held that the appellant was entitled to interest at a rate of 12% per annum from the date of deposit till the date of refund, citing precedent rulings. The appeal was allowed, and the impugned order was modified accordingly, with instructions for the balance interest to be granted within 30 days.

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Issues:
- Correct amount of interest granted on deposit made during investigation
- Interpretation of Section 35FF of the Central Excise Act regarding interest on successful appeal

Analysis:
1. Correct amount of interest granted on deposit made during investigation:
The appellant, a builder, had deposited an amount of 25 lakhs during an investigation under protest. Subsequently, a demand of over 25 lakhs was confirmed, which the appellant successfully appealed against. The appellant then sought a refund of the deposited amount, including interest. However, the refund granted only included interest on a portion of the deposited amount, leading to the appeal before the Commissioner (Appeals). The Commissioner (Appeals) rejected the appeal, prompting the appellant to further challenge the decision.

2. Interpretation of Section 35FF of the Central Excise Act regarding interest on successful appeal:
The crux of the issue revolved around the interpretation of Section 35FF of the Central Excise Act, which governs the grant of interest to an assessee on success in an appeal. The appellant argued that interest should be granted from the date of deposit till the date of refund at a rate of 12% per annum, citing precedent orders of the Tribunal, particularly the case of Parle Agro Limited. On the other hand, the Revenue contended that the notified rate of interest under Section 35FF was 6%.

3. The Tribunal, after considering the arguments presented by both parties, relied on the ruling of the Division Bench in the case of Parle Agro Ltd. and held in favor of the appellant. The Tribunal concluded that the appellant was entitled to interest at a rate of 12% per annum from the date of deposit till the date of refund. The Adjudicating Authority was directed to grant the balance interest within 30 days from the date of the order. Consequently, the appeal was allowed, and the impugned order was modified accordingly. Additionally, the Registry was instructed to correct the appeal classification to Service Tax Appeal instead of Excise Appeal.

4. In summary, the judgment addressed the issue of correct interest granted on a deposit made during an investigation, emphasizing the application of Section 35FF of the Central Excise Act. The decision clarified the entitlement of the appellant to interest at a rate of 12% per annum on the deposited amount, setting a precedent based on previous Tribunal rulings.

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