Refund of pre-deposit

[samir agrawal]

An assessee filed an appeal in Cestat against OIO. A pre-deposit was made in 2013 as a pre condition for staying the order of OIO.

The Cestat has now set aside the OIO and remended the matter to decide afresh.

What is the rate of interest payable by the department on refund of pre deposit of this service tax?

AI Summary

Interest on pre-deposit refunds fixed by statute; tribunal treats interest as accruing from deposit until refund.
Interest on refunds of pre-deposits in service-tax appeals is governed by a notification-fixed statutory rate under the Central Excise regime as applied to service tax; that statutory rate is the baseline entitlement for delayed refund interest. Tribunal precedent treats interest on pre-deposit refunds as accruing from the date of deposit until refund, while higher rates awarded by courts are characterised as penal or enhanced interest and do not amend the prescribed statutory rate.