2009 (7) TMI 991 - AT - Central Excise

Summary

Issues involved: Central Excise duty on unusable clinker, payment of interest on reversed Cenvat Credit.

Summary:
The case involved the appellants, engaged in Cement manufacturing, who accumulated unusable clinker stock upon ceasing operations in 2002. They sought waiver of duty on the dead stock but later paid back the credit availed on the clinker based on a CBEC circular. Subsequently, they were issued a notice for interest recovery under C.Ex. Rules. The main contention was whether the payment of interest was justified after reversing the Cenvat Credit.

On appeal, the Commissioner rejected their plea, leading to the present appeal. The appellant argued that since the credit reversal was not required, interest payment should not apply, citing relevant legal decisions supporting their stance.

The Tribunal noted that the credit reversal was not contested by the appellants, but opined that if the credit was not required to be reversed, interest payment would not be warranted. Therefore, the impugned order confirming interest against the appellant was set aside, and the appeal was allowed with consequential relief.