2026 (1) TMI 1532 - AT - Customs

Rate of interest on refund of pre-deposit fixed at 6% by statutory notification, appeal dismissed enforcing that rate.

Rate of interest on refund of pre-deposit must follow the statutory notification fixing the rate at 6% per annum; the tribunal applied the Delhi High ... Rate of interest on refund of pre-deposit - interest payable where pre-deposit relates to duty - Tribunal's remedial directions and Rule 41 CESTAT Procedure Rules, 1982 - Notifications issued u/s 11BB of the Central Excise Act and Section 129EE of the Customs Act - Notification No. 70/2014 rate of interest at 6% per annum - HELD THAT:- It is observed that there is Notification No. 67/2003-CE followed by Notification No. 70/2014 nothing that the rate of interest to be awarded as per statute as to vary within the range at the rate of 5% to 30%, as at the rate of 6% only. Hon’ble High Court of Delhi in the case of Commissioner of Customs Vs. M/s. D.D. International Pvt. Ltd. [2023 (12) TMI 1340 - DELHI HIGH COURT] has held that the notification issued in exercise of power under Section 129EE of Customs Act, 1962 which is in pari materia to Section 11BB of the Act, since is in existence, the interest shall be computed and paid at the rate of 6% per annum as mentioned in the said notification. No reason to differ from those decisions. Though the appellant has impressed upon the delay of eight years as has occurred due to delay apparent on part of the department. But the Tribunal being creature of statute is not vested inherent powers. It is bound by the statute. Since the Notification No. 70/2014 has been issued squarely under the statutory mandate, I find no reason to not to accept reasoning given by Commissioner (Appeals). The decision in the case of Bird Audio Electronics [2022 (3) TMI 101 - CESTAT NEW DELHI] is held not applicable to the present case because in that case even refund claim was rejected. The decision of Parle Agro Pvt Ltd [2021 (5) TMI 870 - CESTAT ALLAHABAD] is also not applicable to the present case because in the said case the Notification of 2014 was not brought to the notice of the court, also for the reason that the delay in the present case is actually on part of the appellant who delayed in filing appeal against the initial order of denial of interest to the appellant. In totality of the above discussion, the order under challenge is hereby upheld. Consequent thereto, the appeal is dismissed. Issues: Whether the amount deposited by the appellant as pre-deposit during the pendency of their appeal, after appropriation of confirmed duty and penalty, ought to be refunded with interest at the rate of 12% per annum from the date of deposit until disbursal.Analysis: The dispute is confined to the rate of interest payable on the refunded pre-deposit. The statutory scheme and notifications issued under provisions governing interest on deposited duty (including Notification No. 67/2003-CE and Notification No. 70/2014 issued under the provisions corresponding to Section 11B/11BB of the Central Excise Act and Section 129EE of the Customs Act) fix the rate of interest to be applied. Prior authorities, including High Court and Tribunal decisions, have held that where deposits relate to duty/tax, the rate specified by the relevant notification must be applied. The Tribunal noted that the Commissioner (Appeals) granted interest from date of deposit to disbursement but adopted the rate prescribed by Notification No. 70/2014 (6%). The appellant's reliance on decisions awarding higher interest was distinguished on facts and on non-application or non-consideration of the 2014 notification in those decisions. The Tribunal observed it is bound by the statutory notifications prescribing the rate and found no basis to alter the rate to 12%.Conclusion: The impugned order awarding interest at 6% per annum is upheld and the appellant's claim for interest at 12% is rejected; the appeal is dismissed (decision against the appellant and in favour of the revenue).