Interest on wrong Cenvat credit requires actual utilisation, not merely a book entry or later reversal.

Interest on wrongly taken Cenvat credit is not recoverable merely because the credit was recorded as a book entry, where the credit was later reversed and there was no allegation or proof that it was actually utilised for clearance of goods on payment of duty. The analysis distinguishes wrongful availment from actual use of credit and treats utilisation as necessary to sustain an interest demand. On the facts noted, the interest demand could not be maintained, and the order setting it aside was affirmed.

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Issues: Whether interest was recoverable on Cenvat credit wrongly taken but only reflected as a book entry and subsequently reversed, in the absence of any allegation or proof of utilisation of the credit.

Analysis: The dispute concerned transfer and availment of Cenvat credit after shifting of the unit. The finding that credit had been wrongly taken did not, by itself, establish liability to interest where the record showed only a book entry and reversal of the credit. In the absence of any allegation that the credit was actually utilised for clearance of goods on payment of duty, the demand of interest could not be sustained merely on the basis of wrongful availment.

Conclusion: Interest was not recoverable on the facts found, and the assessee succeeded on this issue.

Final Conclusion: The appeal was dismissed, and the order setting aside the interest demand was upheld.

Ratio Decidendi: Interest on wrongly taken credit is not leviable merely because the credit was entered in the books; actual utilisation of the credit is necessary to sustain the interest demand.

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