Delayed refund of pre-deposit carries interest from three months after the final order, with departmental refusal unable to defeat relief.

Refund of a pre-deposit was recognised as carrying interest where payment was delayed after an earlier final order granting consequential relief. The Department's later refusal to refund on limitation could not defeat relief already granted by the Tribunal, and the administrative circular was treated as supporting interest on delayed refund. Interest was fixed at 12% per annum, running from the expiry of three months after receipt of the earlier final order.

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Issues: Whether the appellant was entitled to refund of the pre-deposit of Rs. 61.70 lakhs with interest, and from what date interest was payable.

Analysis: The amount remained unpaid even after the Tribunal's earlier final order granting consequential relief. The subsequent rejection of refund on limitation was not treated as an implementation of the earlier order, as the Department could not nullify relief already granted by the Tribunal. The Tribunal relied on the view that refund of pre-deposit carries interest where payment is delayed, and noted that the departmental circular also recognised liability for interest on delayed refund. On that basis, the Tribunal accepted the claim for interest and fixed the rate at 12% per annum from the expiry of three months after receipt of the earlier final order.

Conclusion: The appellant was held entitled to refund of Rs. 61.70 lakhs with interest at 12% per annum from the expiry of three months from receipt of the Tribunal's earlier final order.

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