The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Delhi bench has held that the delayed refund of excise duty paid during the period of investigation is eligible for interest under section 35FF of the Central Excise Act, 1941.
The appellant, M/s Shri NakodaIspat Ltd approached the Tribunal asking for a refund of the duty paid along with interest and equal penalty. This Tribunal, while granting the stay, directed the appellants to deposit the full amount of duty and waived the amount of interest and penalty. Later, the appellant received an order in their favor and therefore, was eligible for the refund of the amount paid along with interest, for which, the department refused.
Mr. Anil Choudhary, Member (Judicial) observed that the Division Bench of this Tribunal in Parle Agro Limited, wherein the amount was deposited during the stage of investigation/audit, held that on being successful in the appeal, interest is allowable under Section 35FF from the date of deposit till the date of refund.
“Further, following the ruling of the Apex Court in the case Sandvik Asia Ltd. (supra), it has been held that interest shall be payable @ 12% p.a. Further, Single Member Bench of this Tribunal in the case of Riba Textiles Ltd vs. CCE & S.T., 2020(2) TMI 602-Chandigarh have also granted interest @ 12% p.a. under Section 35FF. This order had been appealed against by Revenue before Hon’ble Punjab & Haryana High Court in CEA No. 8/2022, by its judgment dated 14/03/2022, High Court has upheld the grant of interest @ 12% p.a., relying upon the ruling of the Apex Court in the case of Sandvik Asia Ltd,” the Tribunal said.
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