2016 (10) TMI 1047 - AT - Central Excise

Liability of interest - CENVAT Credit wrongly taken but reversed before utilization - Held that - the appellant has produced the opening balance and closing balance of the credit account during the period February 2009 to September 2009 which evidences that the appellant had sufficient balance during the relevant time before reversal of the credit - The issue stands covered by the judgments laid in the case of CCE & ST, LTU, Bangalore V/s Bill Forge Pvt Ltd. 2011 (4) TMI 969 - KARNATAKA HIGH COURT , where it was held that once the entry was reversed, it is as if that the Cenvat credit was not available - the claim of interest by the revenue as well as the imposition of the penalty is unsustainable - appeal allowed - decided in favor of appellant.

Summary

The judgment by Appellate Tribunal CESTAT Hyderabad states that the appellant is not liable to pay interest on CENVAT Credit wrongly taken but reversed before utilization. The decision is based on precedents and evidence of sufficient credit balance. The impugned order is set aside, and the appeal is allowed.