In a recent decision, the CESTAT, Chennai branch ruled that interest cannot be allowed in case of reversal of the CENVAT credit when adequate credit is available under the Excise law.
The appellants, instant case, approached the Appellate Tribunal raising a question that whether interest is payable on the amount of reversal of the CENVAT credit taken but not utilized when adequate credit existed in statutory records.
“It is the consistent view of this Bench following the ratio of the Honble Supreme Court in the case of Commissioner of Central Excise, Mumbai I Vs. Bombay Dyeing & Mfg. Ltd. 2007 (215) ELT 3 (SC) that when there is adequate credit available, reversal arising out of unutilized credit which was taken wrongly shall not result in levy of interest. Therefore, the authority shall examine the record to find out whether on the date of taking credit, there were adequate credit available on record. If he is satisfied, there shall be no levy of interest.” the bench observed.
Read the full text of the order below.
