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HC unable to find any justification for the respondents to retain the amount deposited by the petitioner of its own volition, during the audit/investigation, the order refusing refund are found to be illogical and de hors the statutory provision, the department is required to refund such amount

Section 35F of the Central Excise Act — Pre Deposit -- The petitioner sought a direction to the respondents to forthwith refund with interest “pre-deposit” of Rs.2,38,00,000/-. The appeal preferred against the order dated 3rd October, 2011 passed by the Commissioner, has been finally allowed by the Tribunal by order dated 22nd February, 2018 and revenue appeal has been dismissed on 24th August, 2018. The court in earlier decision ordered the respondents should ensure that the amount is refunded with interest within four weeks. However, till 25th February, 2020, neither refund had been made nor any action taken pursuant to the order dated 17th December, 2019. The respondents declining refund to the petitioner has submitted that since the petitioner had deposited the said amount of Rs.2,38,00,000/-, even though under protest, before preferring the appeal to CESTAT and not by way of pre-deposit under Section 35F of the Central Excise Act, notwithstanding the appeal of the petitioner against total demand of Rs.4,66,39,061/-, and in which the said sum of Rs.2,38,00,000/- had been adjusted, being allowed, the petitioner was not entitled to refund of Rs.2,38,00,000/-. The court observed that there is no justification for the respondents retaining the said amount Held that:-The Hon’ble Court directed the respondents to refund the amount on or before 15th July, 2020 with interest @ 6% per annum from 1st November, 2006 to 31st May, 2018 and with interest @ 7.5% per annum from 1st June, 2018 till the date of refund on or before 31st July, 2020. If the said amount is not refunded by 15th July, 2020, the rate of interest with effect from 1st August, 2020 shall stand enhanced to 12% per annum. The respondents are burdened with costs of Rs.25,000/- payable to the petitioner.
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