Cenvat credit reversal and interest depend on actual utilisation of wrongly retained credit, not reversal alone.

Cenvat credit on inputs sent to job workers had to be reversed if the goods were not received back within 180 days under Rule 4(5)(a), but interest could arise under Rule 14 only where the credit was actually taken or utilised wrongly. The record did not clearly establish whether the reversed credit had remained unutilised in the books or had been used for payment of duty on final products. That factual position required verification before any interest liability could be confirmed, so the matter was sent back for fresh adjudication.

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Issues: Whether interest was payable on Cenvat credit reversed after expiry of the 180-day period for inputs sent to job workers under Rule 4(5)(a) of the Cenvat Credit Rules, 2004, and whether the credit had been actually utilised so as to attract Rule 14.

Analysis: Credit sent to job workers and not received back within 180 days had to be reversed, and delayed reversal could attract interest only if the credit had been utilised wrongly. Rule 14 covers recovery with interest where credit is taken or utilised wrongly or erroneously refunded, but the record did not clearly show whether the credit remained unutilised in the books or had been used for payment of duty on final products. That factual position required verification before deciding the interest demand.

Conclusion: The matter required factual re-examination, and the interest demand was set aside for fresh decision by the original adjudicating authority.

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