Investigation-stage deposit treated as refundable amount, with refund limitation inapplicable and interest payable on repayment.

An amount reversed during investigation, without any show cause notice confirming that reversal, was treated as a deposit and not as duty paid under an adjudication or demand order. On that footing, the six-month refund limitation under Section 11B of the Central Excise Act, 1944 was held inapplicable, and the assessee's refund claim was maintainable. The Tribunal also followed earlier rulings that investigation-stage deposits are refundable as such and carry interest after the prescribed period under Section 11BB, so interest was payable on the refunded amount.

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Issues: Whether the amount reversed by the assessee during investigation was a mere deposit refundable without reference to the six-month limitation for refund of duty under Section 11B of the Central Excise Act, 1944, and whether interest was payable on the refund under Section 11BB of the Central Excise Act, 1944.

Analysis: The amount was reversed during investigation, and no show cause notice was issued for confirmation of that reversal. The notice that was issued related only to personal penalty, which was ultimately set aside. The Tribunal treated the sum as a deposit made during investigation and not as duty paid pursuant to an adjudication or demand order. On that basis, the statutory limitation for refund of duty was held inapplicable. The Tribunal also followed earlier decisions holding that amounts deposited during investigation are refundable as deposits and carry interest from the prescribed period after the refund claim.

Conclusion: The limitation under Section 11B of the Central Excise Act, 1944 did not apply, and the assessee was entitled to refund of the amount with interest under Section 11BB of the Central Excise Act, 1944.

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