Interest on delayed investigation-deposit refunds is payable at 12% where no governing statutory rate applies.

Delayed refund of an amount deposited during investigation attracts interest at 12% per annum where the underlying duty demand has been set aside and no statutory provision prescribed the applicable interest rate for the relevant period. A jurisdictional High Court ruling requiring 12% interest binds the Tribunal within that territorial jurisdiction despite contrary views of other High Courts. The notification prescribing 6% interest under Section 129EE does not apply to this category of refund. The deposit must therefore be refunded with interest at 12% per annum.

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Issues: Whether delayed refund of an amount deposited during investigation carries interest at 6% or 12% per annum.

Analysis: The amount deposited during investigation was retained after the underlying duty demand was set aside. The jurisdictional High Court had ruled that, where no statutory provision governed the rate of interest on delayed refund of such deposit for the relevant period, interest was payable at 12% per annum. That ruling was binding within the Tribunal's territorial jurisdiction notwithstanding divergent views of other High Courts. The notification fixing 6% interest under Section 129EE did not govern the refund in question.

Conclusion: Interest at 12% per annum is payable on the delayed refund of the amount deposited during investigation, in favour of the assessee.

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