@JUDGMENTTAG-ORDER
1. This writ appeal has been filed against the order dated 7-3-2000, passed in W.P. No. 14851/2000 whereby the learned single Judge has
directed the appellants-Department to pay the interest on the pre-deposit amount, at the rate of 18% p.a. from the date of the order of CEGAT
i.e. 2-9-1999 till actual payment made on 14-9-2000.
2. In the instant case, against the demand made by the appellants-Department, the respondent-Company has filed an appeal before the Customs,
Excise and Gold (Control) Appellate Tribunal (hereinafter referred to as ""CEGAT""). The ""CEGAT"" directed the respondent-Company to pay a
sum of Rs. 30 lakhs as pre-deposit for entertaining the appeal. The respondent-Company has also paid the said amount. Ultimately, the appeal
was allowed in favour of the respondent-Company on 2-9-1999 and the demand was set aside. In spite of the repeated requests made by the
respondent-Company, the pre-deposit amount was not repaid by the Department. Therefore, the respondent-Company has filed the writ petition.
But, during the pendency of the writ petition the entire pre-deposit amount was repaid on 14-9-2000, without interest.
3. The learned single Judge, after hearing both sides and on considering the case laws cited, directed the Department to pay 18% interest, as
stated above. Aggrieved, against that order, the Department has filed the present writ appeal.
4. The main question involved in this writ appeal is whether the assessee is entitled to get interest on the pre-deposit, if so, at what rate?
5. Learned Additional Central Government Standing Counsel for the Department submits that the repayment of pre-deposit is not a refund u/s 11B
of the Central Excise Act. Therefore, the respondent-Company is not entitled for any interest. He submitted that the learned single Judge has
wrongly relied on Suvidhe Ltd. Vs. Union of India, and Kuil Fireworks Industries Vs. Collector of Central Excise and another, . The decision in
Suvidhe is not applicable to the facts of the present case as in that case, the Department issued show cause notice invoking the doctrine of unjust
enrichment in the pre-deposit amount, which was thoroughly dishonest and baseless and it was found that the very issuance of show cause was
against the legal propriety and hence the Apex Court ruled that for such dishonest and legally baseless notice, the assessee should got the
additional relief and granted 15% p.a. interest on the pre-deposit amount till payment. In the Kuil Fire Works case, the Court has come to the
conclusion that the goods were illegally detained by the Authorities and the assessee could not be made to suffer on account of an illegal act of
detention of the goods by the excise authorities and directed the Department to pay interest at the rate of 12% p.a. Hence this decision is also not
applicable to the case on hand. Therefore, in the absence of any specific provision, the respondent-Company is not entitled for any interest,
according to the Department.
6. On the other hand, learned Senior Counsel for the respondent-Company submits that there is no error in the order of the learned single Judge as
they have paid the pre-deposit for entertaining the appeal and once the appeal is allowed and the demand was set aside, the deposit amount is
bound to be repaid with interest, and the learned single Judge has rightly awarded interest and this Court should not interfere in the discretion so
exercised.
7. We have heard the learned Counsel for the parties and perused the materials on record. The order of the CEGAT was passed on 2-9-1999,
whereas, the pre-deposit amount was repaid on 14-9-2000. The learned A.C.G.S.C. has not been able to show whether it is necessary for them
to get audit clearance as the amount involved is more than 5 lakhs rupees, as argued and when they moved for such clearance. He cannot take
advantage of the reply dated 11-9-2000 on the pretext that there is no provision to pay interest in case of return of pre-deposit. The argument of
learned Additional Central Government Standing Counsel that the learned single Judge wrongly relied upon the case laws cited is not acceptable.
Further, in the above cases, interest was allowed. So, the Department cannot escape the liability to pay interest merely stating that the Court has
not found fault on the Department as was done in the above cases. In the absence of any material that there is no delay on the part of the
Department, it cannot be presumed that the delay is on account of the non-clearance from the Audit Department. That apart in the absence of any
material to show that the amount could not be paid in time due to the mistake on account of non-clearance from Audit Department, the
Department is liable to pay interest. If we consider the argument of the learned Additional Central Government Standing Counsel in another aspect
also, one the Department is claiming interest from assessees for non-payment of deposit within due time and imposing 24% interest, the
Department cannot take the plea that they are not liable to refund the pre-deposit amount with interest for want of no provision to that effect.
Under the circumstances, the respondent-Company is entitled to receive interest on the payment of pre-deposit amount.
8. Now, the question remains is whether the respondent-Company is entitled to receive interest at 18% or 15% as suggested. On consideration,
we think that the respondent-Company is entitled to get 15% interest from the date of the order of CEGAT. The learned single Judge has awarded
18% interest. Under such circumstances, we modify the order of the learned single Judge and direct the appellant-Department to pay 15% interest
on the pre-deposit from the date of the order of CEGAT i.e. 2-9-1999 up to 14-9-2000, within one month from today. In case, it is not paid
within the stipulated time, the respondent-Company is entitled to receive 18% interest onwards, till the actual realisation. With the above
observations, the writ appeal is disposed of. No costs. Consequently, connected CMP is closed.
