2020 (2) TMI 189 - AT - Service Tax

Demand of interest on amount deposited under Section 35F of the Central Excise Act, 1944 - HELD THAT - The appellant has filed a refund claim for the amount deposited as pre-deposit for entertaining their appeal by this Tribunal and any pre-deposit made by the assessee is a deposit under Section 35F of the Central Excise Act, 1944. The appellant has rightly claimed interest under Section 35FF of the Act on refund of pre-deposit made by them under Section 35F of the Act. Appellant has claimed interest under Section 35FF for the amount deposited by them for entertaining their appeal by this Tribunal. The appellant is entitled to claim interest on the pre-deposit i.e. the whole amount deposited by the appellant for entertaining the appeal - Appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
Appeal against denial of interest on amount deposited under Section 35F of the Central Excise Act, 1944.

Analysis:
The appellant filed an appeal challenging the impugned order denying interest on the amount deposited under Section 35F of the Central Excise Act, 1944. The appellant had made a deposit before filing the appeal, and upon succeeding in the appeal, sought a refund of the deposited amount along with interest. However, it was noted that the appellant had deposited an amount exceeding the required 7.5% of duty for filing the appeal. The denial of interest on the excess amount was based on the argument that it was not deposited under Section 35F of the Act, thus not eligible for interest under Section 35FF. The appellant contended that the excess amount paid was indeed a pre-deposit under Section 35F, making them entitled to claim interest under Section 35FF. The Authorized Representative for the respondent argued against the payment of interest on the excess amount, requesting dismissal of the appeal.

Upon review, the Tribunal found that the appellant's refund claim for the pre-deposit made for the appeal was valid under Section 35F of the Act. It was established that any pre-deposit by the assessee falls under the purview of Section 35F. Consequently, the appellant was deemed eligible to claim interest under Section 35FF on the entire amount deposited for the appeal. The Tribunal concluded that the appellant had the right to claim interest on the pre-deposit made for the appeal, setting aside the impugned order. As a result, the appeal was allowed, granting the appellant consequential relief.

This judgment clarifies the eligibility of an appellant to claim interest on the pre-deposit made for entertaining an appeal before the Tribunal under Section 35F of the Central Excise Act, 1944. It emphasizes that any amount deposited by the appellant for the appeal falls within the ambit of Section 35F, entitling them to interest under Section 35FF. The decision highlights the importance of adhering to the statutory provisions governing pre-deposits and the subsequent refund claims, ensuring that appellants receive their rightful entitlements in such cases.