2023 (2) TMI 774 - AT - Central Excise

Appellant entitled to 6% interest on refund. Impugned orders set aside.

The Tribunal held that the appellant is entitled to interest on the refund of the pre-deposit amount at a rate of 6% from the date of deposit until the ... Interest on refund of pre-deposit - entitlement to interest from date of deposit - interest payable after three months from filing of refund application - pre-deposit treated as deposit made pending appeal/inspectionInterest on refund of pre-deposit - entitlement to interest from date of deposit - pre-deposit treated as deposit made pending appeal/inspection - Appellant entitled to interest on refund of pre-deposit from the date of deposit until the date of refund; impugned orders set aside and appeals allowed with consequential relief. - HELD THAT: - The narrow question adjudicated was whether interest on amounts deposited as pre-deposit is payable from the date of deposit or only after three months from filing of a refund application. Applying the consistent view of the Tribunal, High Courts and the Supreme Court in the authorities relied upon, the Tribunal held that amounts deposited as pre-deposit (including deposits made during investigation or pending litigation that are to be treated as pre-deposit) attract interest from the date of deposit till the date of refund. The decision draws support from earlier precedents which treated such deposits as pre-deposit and awarded interest from the date of deposit, and distinguishes decisions that apply a three month rule where the statutory framework or facts differ. On that basis the impugned orders denying interest from the date of deposit were set aside and the appeals allowed with consequential relief to direct payment of interest from date of deposit until actual refund at the rate applied by the Tribunal.Impugned orders set aside; appeals allowed and appellant entitled to interest on the pre-deposit from date of deposit until date of refund.Final Conclusion: The Tribunal held that the appellant is entitled to interest on the refunded pre-deposit from the date of deposit up to the date of actual refund and accordingly allowed the appeals with consequential relief. Issues Involved:1. Whether the appellant is entitled to interest from the date of deposit of pre-deposit or after three months from the date of filing of the refund application.Issue-Wise Detailed Analysis:Issue 1: Entitlement to Interest from the Date of Deposit of Pre-DepositArguments by the Appellant:- The appellant argued that the interest on the refund amount, which was deposited as a pre-deposit, should be payable from the date of the pre-deposit itself. This argument is supported by several judgments: - CCE, Panchkula vs. Riba Textiles Limited (2022) - Pr. Commissioner of CGST, New Delhi vs. Emmar MGF Construction Pvt. Limited (2021) - Hawkins Cookers Limited vs. CCE, Chandigarh (2017) - CCE, Kutch (Gandhidham) vs. Deep Construction Co. (2019) - Team HR Services Pvt. Limited vs. UOI (2020) - Ashima Limited vs. CCE & ST., Ahmedabad (2019) - CCE, Hyderabad vs. ITC Limited (2005)Arguments by the Revenue:- The Revenue reiterated the findings of the impugned order, which presumably did not favor the appellant's claim for interest from the date of pre-deposit.Tribunal's Findings:- The Tribunal acknowledged that the issue to be decided was whether the appellant is entitled to interest from the date of the pre-deposit when the Tribunal has set aside the demand.- The Tribunal referred to several judgments, including those cited by the appellant, to establish that interest should be given from the date of the pre-deposit. Notable cases include: - Riba Textiles Limited: The Punjab & Haryana High Court referred to the Supreme Court's decision in Sandvik Asia Ltd. v. CIT, Pune, which emphasized that interest should be paid from the date of the pre-deposit. - Emmar MGF Construction Pvt. Limited: The Tribunal's Principal Bench upheld that interest @ 6% per annum should be paid from the date of deposit till the date of actual refund. - Hawkins Cookers Limited: The Tribunal's Chandigarh Bench confirmed that no application for refund is necessary, and interest should be paid from the date of the appellate order. - Team HR Services Pvt. Limited: The Delhi High Court ordered interest @ 6% per annum from the date of deposit till the date of refund, with an enhanced rate if the refund was delayed.Conclusion:- The Tribunal concluded that the appellant is entitled to interest on the refund of the pre-deposit amount @ 6% from the date of deposit till the date of refund. The impugned orders were set aside, and the appeals were allowed with consequential relief.Pronouncement:- The judgment was pronounced in the open court on 07.02.2023.