Order date – 02 September 2022

Facts – 

• The Respondent, M/s. Emaar MGF Construction Pvt. Ltd., were issued show cause notice dated 30.08.2011 demanding service tax with interest and penalty and this demand was confirmed by the adjudicating authority by order dated 30.04.2013. 
• The appellant earlier filed an application before the Tribunal for waiver of pre-deposit in terms of Section 83 of the Finance Act, 1944, read with provisions of sections 35F and 35FF of the Excise Act, and by an order dated 11.05.2016, the Tribunal disposed of the application by directing that a pre-deposit of Rs. 30 crores, which was later modified to the extent to 7.5% of the total demand of Rs. 130 crores should be deposited within three months. 
• This amount of Rs. 10,13,90,100/- was deposited by the respondent on 28.11.2016. The respondent, thereafter, filed an application for refund of the amount deposited towards pre-deposit with interest, which was later sanctioned but interest was denied.
• The Commissioner (Appeals), therefore, held that as the amount was deposited under the amended provisions of 35F, payment of interest on the pre-deposit amount would be governed by the amended provisions of section 35FF.
• Aggrieved, the appellant filed an appeal.

Issue – 

• Whether the respondent is eligible for the payment of interest on refund of the amount deposited towards the pre deposit?

Order – 

• The Tribunal observed that section 35FF, post 06.08.2014, provides that where an amount deposited by the appellant under section 35F is required to be refunded consequent upon the order of the appellate authority, there shall be paid to the appellant interest at such rate, not below 5% and not exceeding 36% on such amount from the date of payment of the amount till of such amount. 
• It is, therefore, apparent that the amended section 35FF deals with amount that is deposited post 06.08.2014 under section 35F and not to any amount that is deposited under the proviso to the unamended Section 35F. It is only under the proviso to the unamended section 35F that the amount is determined towards pre-deposit. On the other hand, it is the amended section 35F that requires the appellant to deposit 7.5% of the duty.
• In the present case, the amount was deposited by the respondent pursuant to the directions issued under the unamended provisions of the 35F. Such being the position, interest on delayed refund of amount would continue to be governed by the unamended provisions of section 35FF.
• It is not in dispute that if the unamended provisions of section 35FF are applicable to the facts of the present appeal, hence no interest would be payable to the respondent since the amount was refunded within three months from the date of communication of the order. 
• Appeal allowed.