Interest on wrongly availed Cenvat credit remains payable even if the credit is reversed before utilisation, the Court held.

Interest is payable on wrongly availed Cenvat credit under Rule 14 of the Cenvat Credit Rules, 2004 read with Section 11AB of the Central Excise Act, 1944 even where the credit is reversed before utilisation. The Court followed its earlier binding precedent and rejected the Tribunal's view that pre-utilisation reversal by itself defeats the levy of interest. The issue was answered against the assessee and in favour of the Revenue, and the Revenue's demand for interest was restored.

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Issues: Whether interest is payable on wrongly availed Cenvat credit under Rule 14 of the Cenvat Credit Rules, 2004 read with Section 11AB of the Central Excise Act, 1944 when the credit is reversed before utilisation.

Analysis: The issue was treated as covered by an earlier decision of the Court on the same question. The Tribunal's view that interest was not payable merely because the credit had been reversed before utilisation could not be sustained in light of that binding precedent.

Conclusion: The issue was answered against the assessee and in favour of the Revenue; interest was payable.

Final Conclusion: The appeal succeeded, the Tribunal's order was set aside, and the Revenue's demand for interest stood restored.

Ratio Decidendi: Interest is payable on wrongly availed Cenvat credit under Rule 14 of the Cenvat Credit Rules, 2004 notwithstanding reversal of the credit before utilisation.

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