Order Date – 07 December 2023

Parties:M/s. Raghuveer Metal Industries Limited and M/s. Rajasthan Commercial House Vs Commissioner of C.G.ST., Jaipur-I

Facts –

• The Appellant, M/s. Raghuveer Metal Industries Limited, filed a refund claim on 21.12.2017 pursuant to the order dated 20.10.2017 setting aside the entire demand, the order of confiscation of cash and goods and also the order of imposition of penalties.
• Though the refund was allowed but without interest  holding that the amount in question is treated as pre deposit under Section 35F of the Act. Hence it shall attract payment of interest on the refund amount after expiry of three months from the date of communication of order of the appellate authority till the date of refund for such amount.

Issue –

• Whether the interest @ 12% is payable to the appellant?

Order –

• The Tribunal observed that  the amount in question is neither the amount of duty nor is the amount of pre deposit, the amount in question is merely a deposit with the Revenue which the Revenue had no authority to retain as the appellant was the owner thereof.
• Once confiscation order about impugned currency is set aside, it becomes clear that the seized currency continues to be the appellant's property. He cannot be deprived of the same and is entitled for benefits arising out of said property. Hence interest accrued on the amount in question during the period it was in fixed deposit is the property of the owner of the amount i.e. the appellant herein. 
• Hence it was held that the appellants are entitled to claim the interest on the amount as has been refunded in their favour that too to be paid from the date of payment of initial amount till the date of its refund.
• It was observed that the rate of interest has to be notified by the Central Government from time to time and from the notifications it is clear that the rate of interest varies from 6% to 18%. The above entire discussion makes it clear that the amount in question was an amount in the form of pre-deposit. Hence, it is the refund in terms of Section 35FF. The bare perusal of Section 35FF as amended makes it clear that the proviso is applicable to such amounts which were deposited under Section 35F.
• Section 35FF itself prescribes the rate of interest in the range of 5% to 36% when these provisions is read in the light of the above provisions and the decisions with respect to the rate of interest. Hence it was held that the appellant is entitled to receive interest at the rate of 12%. The appeal allowed.