Interest recovery under Cenvat rules held time-barred where no fraud or suppression was alleged.

Interest recovery under Rule 12 of the Cenvat Credit Rules, 2002 read with Section 11AB of the Central Excise Act was held time-barred because the provision contained no express limitation period. The Tribunal applied the principle that, where interest recovery is silent on limitation, the period applicable to analogous recovery proceedings may govern. As the credit was taken in 2002 and the demand was raised only in 2005, with no allegation of fraud, suppression of facts or wilful misstatement, the demand could not survive beyond the applicable six-month period.

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Issues: Whether the demand for recovery of interest under Rule 12 of the Cenvat Credit Rules, 2002 read with Section 11AB of the Central Excise Act, 1944 was barred by limitation.

Analysis: The demand for interest did not have an express limitation period under the relevant provisions. However, the Tribunal applied the settled principle that where a provision for recovery of interest is silent on limitation, the limitation applicable to analogous recovery proceedings may govern the demand. As the credit had been taken on 17-5-2002 and the demand was raised only in 2005, and there was no allegation of fraud, suppression of facts or misstatement with intent to evade duty, the demand could not survive beyond the applicable six-month period.

Conclusion: The demand for recovery of interest was barred by limitation and the appeal was allowed in favour of the assessee.

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