The Department is liable to pay interest on the pre-deposit amount in the absence of any material showing delay on their part.

The Order of the Court is as follows :-

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 under Section 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. v. Union of India - and Kuil Fire Works Industries v. Collector of Central Excise. 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 retur