Interest on refunded duty deposits runs from deposit to actual refund, but no separate interest on delayed interest is payable.

Interest on amounts deposited with the Revenue during investigation was held payable from the date of deposit until actual refund, following settled precedent that compensation is due for deprivation of funds. Applying the statutory framework under Section 11BB of the Central Excise Act, 1944, the Tribunal directed interest at 12% per annum on the refunded deposit, subject to adjustment for any amount already paid. However, the claim for further interest on delayed payment of that interest was rejected, as no separate interest on interest was held admissible unless expressly provided by statute.

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Issues: Whether interest on the refunded amount deposited during investigation was payable from the date of deposit till the date of actual refund, and whether any further interest on delayed payment of such interest was admissible.

Analysis: The issue was held to be covered by settled precedent, including earlier Tribunal decisions following the principle that interest on amounts retained by the Revenue compensates the assessee for deprivation of funds. The statutory scheme under Section 11BB of the Central Excise Act, 1944 was noted, but the Tribunal applied the consistent line of decisions granting interest on the deposited amount from the date of deposit till refund. At the same time, the Tribunal accepted the Department's objection that no further interest on interest is payable. The interest was directed at 12% per annum, reduced by any amount already paid.

Conclusion: The assessee was held entitled to interest at 12% per annum on the deposited amount from the date of deposit till the date of actual refund, but not to interest on interest.

Final Conclusion: The appeal succeeded to the extent of securing enhanced interest on the refunded deposit, while the claim for further interest on delayed payment of interest was declined.

Ratio Decidendi: Interest is payable on amounts deposited with the Revenue from the date of deposit until actual refund at the rate applied by the Tribunal, but no separate interest can be claimed on the unpaid interest component unless the statute expressly so provides.

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