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2018 (2) TMI 1662 - AT - Central ExciseEntitlement to interest on interest - case of appellant is that the interest does not remain as interest but it is appropriated towards the outstanding dues. Therefore, the contention of the Department that interest amount ₹ 11,73,799/-, earlier allowed would not again attract interest, is unsustainable in law - whether the Appellant is entitled to interest on ₹ 11,73,799/- appropriated earlier against the confirmed demand? Held that: - The Department even though refunded the said amount of ₹ 11,73,799/-, but declined to pay interest on the same holding that the said amount was earlier sanctioned/allowed to the Appellant as interest to the pre-deposit amount of ₹ 17,43,384/-, hence cannot be considered as principal amount and continues to be interest only - It cannot be denied that had the amount not appropriated, the Appellant would have received the interest amount of ₹ 11,73,799/- along with the principal amount of ₹ 17,43,384/- way back in 1995. Thus, on appropriation the interest is merged with the principle amount. In the result, the Appellant is entitled to interest on the amount of ₹ 11,73,799/-. Appeal allowed - decided in favor of appellant.
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