CENVAT credit reversal: interest was not recoverable where the rule required reversal but did not provide for interest.

Where inputs used in manufacturing were later embedded in finished goods that were destroyed after remission of duty was granted, the applicable CENVAT rule required reversal of the credit taken on those inputs. It did not, however, contain any provision for charging interest on the reversed credit. Applying strict construction of taxing provisions, the text states that nothing can be added by interpretation. On that basis, interest was held not recoverable on the reversed CENVAT credit, and the impugned order was set aside.

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Issues: Whether interest was payable on CENVAT credit reversed on inputs used in manufacture of finished goods that were later destroyed after remission of duty was granted.

Analysis: The applicable rule required reversal of CENVAT credit taken on inputs used in the manufacture of goods in respect of which remission of duty was ordered, but it did not provide for payment of interest on such reversed credit. A taxing provision must be construed strictly according to its language, and nothing can be added to it by interpretation.

Conclusion: Interest was not recoverable on the reversed CENVAT credit. The appeal succeeded and the impugned order was set aside.

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