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2020 (4) TMI 178 - AT - Central ExciseRefund of Interest on interest and penalty component deposited earlier - denial on the ground that Section 11BB of the Central Excise Act, 1944 allows interest only on refund of duty - HELD THAT:- It is not in dispute that the appellant had deposited the duty for ₹ 33,32,327/- i.e. the entire amount of duty, interest and penalty confirmed against the appellant by the original adjudicating authority. The appellant chose to deposit ₹ 5.00 lakhs initially before the Commissioner (Appeals) and later before the CESTAT, the remaining amount in compliance with Section 35F of the Central Excise Act, 1944 - On a plain reading of the provision of Section 35FF, it is clear that the appellant was required to deposit entire amount of duty, interest and penalty while pursuing their appeal before the first appellate authority or CESTAT. Section 35FF prescribes that the amount deposited before the appellate authority, if not refunded within three months from the date of communication of the order to the adjudicating authority, the appellant shall be paid interest at the rate specified under Section 11BB after expiry of three months from the date of communication of the order till the date of refund of such amount. Thus, the reference under Section 35FF of Central Excise Act, 1944 to Section 11BB is only for the limited purpose of applicability of rate of interest in computing the refund amount. The amount deposited with the appellate authorities pursuant to Section 35F of Central Excise Act, 1944 cannot be considered as duty, interest or penalty but as an amount necessary to pursue the appeal before the appellate forum. Consequently, if the decision of the appellate forum is in favour of the appellant, the appellants are entitled to refund of the amount deposited for pursuing the appeal before the appellate authorities within the period prescribed under Section 35FF of Central Excise Act, 1944. The matter is remanded to the adjudicating authority to compute the interest amount keeping in view the provisions of Section 35FF of the Central Excise Act, 1944 as was in force during the material time - Appeal allowed by way of remand.
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