Refund of pre-deposit with interest follows once the adjudication order is set aside and refund remains unpaid after the statutory period.

A pre-deposit made during the pendency of an excise appeal became refundable once the adjudication order was set aside and the appeal had already been allowed. The Tribunal applied the settled view that interest is payable on refund of a pre-deposit and directed interest at the statutory rate under Section 11BB for the period beginning three months after the refund application until payment. The assessee therefore obtained refund of the deposited amount with interest.

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Issues: Whether the assessee was entitled to refund of the pre-deposit with interest, and whether interest was payable on the amount deposited during the pendency of the appeal.

Analysis: The appeal having been allowed earlier and the adjudication order set aside, the amount deposited pursuant to the stay order became refundable to the appellant. The Tribunal followed the binding judicial view that interest is payable on refund of pre-deposit also, and applied the statutory rate prescribed under Section 11BB for the relevant period commencing after expiry of three months from the refund application till payment.

Conclusion: The assessee was entitled to refund of the pre-deposit of Rs. 1.5 lakh along with interest under Section 11BB of the Central Excise Act, 1944, and the relief was granted in favour of the assessee.

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