Pre-deposit refund rights include statutory interest despite DRC-03 payment mode, with litigation costs justified for avoidable departmental harassment.

Refund of pre-deposit is addressed as a statutory consequence of success in appeal, and the amount cannot be denied merely because it was paid through DRC-03 rather than another challan mode. The note states that the appellate deposit under Section 35F remains refundable under the governing Board circular, and interest follows under Section 35FF from the date of deposit until refund. It further identifies rejection of such refund as inconsistent with binding circulars and judicial discipline. The text also treats compensatory litigation cost as warranted where departmental action causes avoidable harassment despite the settled position on refund of pre-deposit.

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Issues: Whether the assessee was entitled to refund of the pre-deposit paid for filing the appeal, together with interest, despite payment through DRC-03, and whether compensatory litigation cost was warranted.

Analysis: The pre-deposit was made in compliance with the appellate filing requirement under Section 35F of the Central Excise Act, 1944, and the refund claim could not be denied merely because the amount was deposited through DRC-03. The Board's circular governing refund of pre-deposit required refund once the assessee succeeded in appeal, and Section 35FF of the Central Excise Act, 1944 mandated interest on the refunded amount from the date of deposit to the date of refund. The order rejecting refund was found contrary to the governing circulars and the settled requirement of judicial discipline. The Tribunal also found that the departmental litigation caused avoidable harassment, justifying compensatory cost.

Conclusion: The assessee was held entitled to refund of the pre-deposit with applicable interest, and compensatory litigation cost was also upheld in its favour.

Final Conclusion: The departmental appeal failed, and the refund grant with interest was sustained, along with directions for payment of litigation cost.

Ratio Decidendi: A pre-deposit made for pursuing an appeal cannot be denied refund merely because it was paid through an alternate challan mode, and once the assessee succeeds in appeal, refund with statutory interest follows as a matter of right.

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