Refund of revenue deposits attracts 12% interest from deposit until repayment where no rate is prescribed.

A dispute over Cenvat credit on welding electrodes was resolved in the appellant’s favour by the Supreme Court on 7 December 2023.

During the proceedings, the appellant had paid ₹1,50,154 under protest on 5 May 2006.

It later sought a refund, which was granted with interest at 6% only from three months after the refund application to the refund date.

The Commissioner (Appeals) rejected the appellant’s request for interest at 12% from the date of deposit.

The appellant appealed to the Tribunal.

Whether the appellant was entitled to interest on the refunded amount of ₹1,50,154 from the date of deposit until the date of refund

Section 11B of the Central Excise Act, 1944 concerns claims for refund of duty and interest paid on duty; Section 11BB provides for interest where a refund ordered under Section 11B is not made within three months of the refund application.

Those provisions do not govern the refund of a revenue deposit, as distinct from duty.

In Principal Commissioner of CGST v. M/s Parle Agro Private Limited, Central Excise Appeal No. 18 of 2021 (Allahabad High Court, 14 November 2025), the High Court affirmed that the Excise Act contains no provision prescribing interest on a revenue deposit.

The Tribunal’s decisions in M/s Parle Agro Pvt. Ltd., 2018 (360) E.L.T. 1005 (Tri.-All.) and 2022 (380) E.L.T. 219 (Tri.-All.), applied the general practice of awarding 12% interest on revenue deposits.

The Tribunal found that the appellant’s payment had not been appropriated by the authorities towards duty and therefore remained a revenue deposit.

Because the refund was of that deposit—not a refund of duty—Sections 11B and 11BB did not limit interest to the period following the refund application.

Applying the Parle Agro decisions, the Tribunal held that interest was payable at 12% from the date of deposit until refund, while crediting the ₹10,342 in interest already paid.