Interest on reversed unutilized CENVAT credit not payable where Revenue suffered no prejudice.

Interest on unutilized CENVAT credit was held not payable where the credit had been reversed and Revenue suffered no prejudice. The factual absence of loss to the exchequer meant that demanding interest would serve no useful purpose in law, so the assessee succeeded on that point.

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Issues: Whether interest was payable on unutilized CENVAT credit that had been reversed and caused no prejudice to Revenue.

Analysis: The unutilized credit had been reversed, and the factual position showed that Revenue suffered no prejudice. In such circumstances, insisting on interest was treated as serving no useful purpose in law.

Conclusion: Interest was not payable; the appeal was allowed to that extent in favour of the assessee.

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