Revenue deposits refundable with interest; final characterisation of deposit and 12% interest award were upheld.

Amounts deposited during investigation and adjudication, where not shown to be towards admitted duty liability or an adjudicated excise demand, were treated as revenue deposits and found refundable with interest. The earlier final order characterising the sums as revenue deposit had attained finality, so the liability to pay interest flowed from that characterisation and not from Section 11BB of the Central Excise Act. The Tribunal's award of 12% interest was also upheld because the applicable statutory notifications had varied between 6% and 18%, and prolonged retention of the assessee's money did not justify interference. The assessee's entitlement to interest on the refunded deposit was therefore confirmed.

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Issues: (i) Whether interest on the refunded amount was payable from the date of deposit in view of the earlier final order treating the amounts as revenue deposit and directing refund with interest; (ii) Whether interest could be awarded at 12% instead of the rate prescribed under the statutory notification.

Issue (i): Whether interest on the refunded amount was payable from the date of deposit in view of the earlier final order treating the amounts as revenue deposit and directing refund with interest.

Analysis: The amounts were not shown to have been deposited towards admitted duty liability or against an adjudicated excise demand. The earlier Tribunal order had already concluded that the sums deposited during investigation and adjudication were revenue deposits and could not be treated as duty, fine, or penalty. That order had attained finality and had also directed refund of the excess deposit with interest. The liability to pay interest therefore arose from the character of the deposit and the final earlier adjudication, not from Section 11BB of the Central Excise Act, 1944.

Conclusion: The issue was answered in favour of the assessee and against the Revenue.

Issue (ii): Whether interest could be awarded at 12% instead of the rate prescribed under the statutory notification.

Analysis: The Tribunal had examined the relevant notifications and found that the applicable interest rate had varied between 6% and 18%. In the facts of prolonged retention of the assessee's money for about 24 years, the award of 12% interest did not give rise to any substantial question of law warranting interference.

Conclusion: The award of interest at 12% was upheld.

Final Conclusion: The appeal failed in its entirety, and the assessee's entitlement to interest on the refunded revenue deposit, including at the higher rate awarded, stood confirmed.

Ratio Decidendi: Amounts deposited during investigation and adjudication, when not shown to be duty paid or made against an adjudicated demand, are revenue deposits refundable with interest, and where the earlier determination on that character has attained finality, the Revenue cannot later invoke the refund provisions to deny or reduce interest.

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