CESTAT allows 12 percent interest if deposited during an investigation

CESTAT allows 12 percent interest if deposited during an investigation

It cited the decision of the Supreme Court in another such matter

The Kolkata branch of the Customs Excise and Service Tax Appellate Tribunal (CESTAT) has allowed the interest at 12 percent from the date of deposit in cases where the amount was deposited during the investigation.

The appellant, Green Valley Industries Limited, had succeeded in its appeal before the CESTAT in October 2020. It had resulted in a refund of Rs.78,16,265, deposited before the issuance of the show-cause notice, while the investigation proceedings were still on.

The adjudicating authority allowed the refund without paying the interest on the amount. It claimed the payment of interest was applicable to a delayed refund of the amount under the Central Excise Act, 1944.

However, the Judicial Member PK Choudhary observed that the appellant had deposited the amounts as refunded during the investigation proceedings, which, leading to the captioned refund of duty, was later set aside by CESTAT.

Citing an earlier decision of the Supreme Court, the tribunal observed that the judgment distinguished to the extent that it was not the subject matter of dispute, hence, not applicable to the case.

The tribunal held, "The appellant is entitled to interest at the rate of 12 percent from the date of deposit till the date of receipt of such refund. The order of the First Appellate Authority is modified to the above extent. The lower authorities are directed to compute the eligible interest as above and pay the same within four weeks from the date of communication of this order."