2019 (5) TMI 1886 - AT - Central Excise

Interest on amount refunded which was pre-deposited - amount was refunded within three months from the date of the communication of the CESTAT s order - Section 35FF of the Central Excise Act as amended w.ef. 6-8-2014 - HELD THAT - The proviso to amend Section 35FF makes it clear that in respect of any amounts pre-deposited prior to 6-8-2014 will continue to be covered by the provisions of the unamended Section 35FF. The unamended provisions provided for payment of interest only if the pre-deposit was not refunded within three months from the date of communication of the order of the appellate authority. Therefore no interest is payable to the appellant in this case. Appeal dismissed.

Summary

Issues:
- Claim for interest on refunded pre-deposit amount under Section 35FF of the Central Excise Act prior to and post amendment in 2014.

Analysis:
The appellant, a manufacturer of micro-nutrients, filed an appeal against a demand raised by the lower authorities, which was later allowed by CESTAT-Bangalore with consequential relief. The appellant had pre-deposited an amount of &8377; 10 lakhs in three instalments between 2007 and 2009, which was refunded by the lower authority within three months of the CESTAT-Bangalore's order. The issue revolved around the applicability of interest on the refunded amount, considering the amendment in Section 35FF of the Central Excise Act in 2014. The appellant sought interest on the refunded amount from the date of the original deposit, as per the amended provision. However, the lower authority rejected the claim, stating that the unamended Section 35FF only required interest payment if the pre-deposit was not refunded within three months of the appellate authority's order.

The Tribunal analyzed the legal provisions and the appellant's arguments, focusing on the proviso to amend Section 35FF. It clarified that amounts pre-deposited before 2014 would continue to be governed by the unamended provisions. The unamended Section 35FF mandated interest payment only if the pre-deposit was not refunded within three months of the appellate authority's order. Consequently, the Tribunal upheld the lower authority's decision, stating that no interest was payable to the appellant in this case. The appeal was rejected, and the impugned order was upheld, disposing of the appeal accordingly.