Whether interest is chargeable when CENVAT Credit wrongly taken is reversed before utilization?
Decision: The Hon’ble CESTAT relying on the decision of Hon’ble Karnataka High Court in the case of M/s Bill Forge Pvt. Ltd. held that interest is compensatory in character & is imposed on an assessee who has withheld any payment of any Tax, as an when it is due & payable. If there is no tax liability, no interest is payable. Section 11AB of the Act is attracted only on delayed payment of duty i.e., where only duty of excise has not been levied or paid or has been short levied or short paid or erroneously refunded, the person liable to pay duty, shall in addition to the duty is liable to pay interest. It is not stipulated that interest is payable from the date of book entry, showing entitlement of CENVAT Credit. Therefore interest cannot be claimed from the date of wrong availment of CENVAT Credit but from the date CENVAT Credit is taken or utilized wrongly.