Pre-deposit interest calculation governed by original Section 35FF provisions despite subsequent amendments

CESTAT New Delhi dismissed appellant's appeal regarding re-quantification of interest on pre-deposit refund. The tribunal held that pre-deposits made during February/March 2006 and May 2013 must be governed by pre-amended Section 35(FF) of CEA 1944, which provides interest payment only after three months from order communication date. Despite subsequent amendments, the proviso mandates that pre-deposits made before 06.08.2014 remain subject to original provisions. CESTAT, being statutory creature, cannot exceed statutory boundaries. The tribunal found no infirmity in the impugned order and upheld existing interest calculation methodology.

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Issues:
The issues involved in the judgment are the remand of interest payment by the Commissioner (Appeals) and the violation of principles of natural justice in passing the order ex-parte.

Remand of Interest Payment:
The appellant, engaged in manufacturing PVC products, faced allegations of issuing invoices without supplying goods and receiving Cenvatable invoices without actual receipt of inputs. The Adjudicating Authority confirmed a demand of approximately Rs.9.73 crores against the appellant with interest and imposed a penalty. The Tribunal allowed the appellant's appeal and directed a refund of Rs.1.65 crores with interest. However, the Commissioner (Appeals) remanded the matter for re-quantifying the interest amount based on the statutory provisions u/s 35(FF) of CEA, 1944. The appeal before the Tribunal challenged this remand order, arguing that it violated principles of natural justice as the order was passed ex-parte without a personal hearing.

Violation of Principles of Natural Justice:
The appellant contended that the impugned order was passed in violation of natural justice as it was ex-parte without providing an opportunity for a personal hearing. The appellant claimed they did not receive the notice for personal hearing, and on the date of the supposed hearing, they attended another matter before the same authority. The appellant also argued that the appeal filed by the Revenue was time-barred, and they were not given a chance to raise this plea due to the ex-parte order. Additionally, the appellant sought interest on the pre-deposit amount from the date of deposit or at least from the date of receipt of the order, citing relevant case laws to support their claim.

Conclusion:
The Tribunal upheld the remand of the interest payment by the Commissioner (Appeals) based on the statutory provisions of Section 35(FF) of CEA, 1944. The Tribunal emphasized that the payment of interest on pre-deposit made prior to 06.08.2014 should be governed by the pre-amended Section 35(FF). The judgment highlighted that the Tribunal cannot intervene beyond the provisions of the Central Excise Act, 1944, and cited Supreme Court decisions to support this stance. Ultimately, the appeal was dismissed, affirming the impugned order.

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