The appellant is entitled to interest on pre-deposits made under Section 35F of the Central Excise Act, 1944, from the date of payment until the date of refund, as mandated by Section 35FF, provided the deposits were made after 06.08.2014.

Heard both sides and perused the case records.

2. Brief facts of the case is that the appellants are engaged inter alia, in the manufacture of boilers, which are cleared to their customers in complete knocked down (CKD) condition for delivery at the customer’s site. Apart from delivery of boilers in CKD condition, the appellants also dispatch bought-out items and deliver the same at the customer’s site. Since the appellants did not include the value of the bought-out items in the assessable value of the boilers for the purpose of payment of central excise duty, the department had initiated periodical show cause notices against the appellants, calling for payment of central excise duty on such amount. The show cause notices issued to the appellants were culminated into various adjudication orders, wherein the proposals made therein were confirmed. Against these adjudication orders, the appellants have filed these four numbers of appeals before the Tribunal.

3. As per the requirement of Section 35F of Central Excise Act, 1944 the appellants had pre-deposited the requisite amount for the purpose of filing and entertainment of the appeals before the Tribunal. Such deposits were made between the period 2016 to 2018. The appeals filed by the appellants were allowed and as a consequence, the department had refunded back the amount of pre-deposit paid by the appellants at the time of filing the appeals. However, the department did not pay interest amount from the date of payment of the pre- deposit amount, till the date of returning back of such amount to the appellants. For non-payment of interest amount, the appellants had contested the adjudication order before the Commissioner (Appeals). The Commissioner (Appeals) vide the impugned order dated 28.09.2023, has allowed cash refund amounting to ₹ 20,81,33,821/- and denied the benefit of interest as claimed by the appellants under Section 35F F of the Central Excise Act, 1944. Feeling aggrieved with the impugned order, insofar as it has rejected the claim of interest, the appellants have preferred this appeal before the Tribunal.

4. Section 35F of Central Excise Act, 1944 as it existed prior to 06.08.2014, provided that for filing of appeal before the Commissioner (Appeals) as well as the Tribunal, the appellants was required to make the pre-deposit of the entire amount of duty confirmed in the order appealed against. However, under the proviso to such Section 35F ibid, discretion was granted to the appellate authorities to fully or partially waive the requirement of pre-deposit for filing of appeal. The said Section 35F ibid was substituted by Section 126 of Finance Act, 2014 providing for deposit of certain percentage of duty demanded or penalty imposed before filing of appeal. In respect of filing of appeal under Section 35B ibid before the Appellate Tribunal, it has been mandated that the appellant has to pre-deposit 7.5% of the adjudged amounts of duty, in case where the duty and penalty are in dispute; 7.5% of penalty, where such penalty is in dispute. Section 35F F ibid was also simultaneously substituted w.e.f. 06.08.2014, providing as under:

“ Section 35FF - Interest on delayed refund of amount deposited under section 35F. -

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 five per cent. and not exceeding thirty-six per cent. per annum as is for the time being fixed by the Central Government, by notification in the Official Gazette, on such amount from the date of paymen