Limitation for interest demands on reversed inadmissible credit barred recovery beyond the statutory period absent suppression.

Interest demanded on reversal of inadmissible CENVAT credit under Section 11A of the Central Excise Act, 1944 must be issued within the prescribed limitation period. Where the credit had already been reversed before the demand notices and there was no allegation of suppression, misdeclaration or similar misconduct to extend limitation, the demand could not be sustained. The same limitation governing recovery under Section 11A applies to interest claims raised under that provision, so the demand was time-barred and rejected in favour of the assessee.

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Issues: Whether interest on reversal of inadmissible credit could be demanded under Section 11A of the Central Excise Act, 1944 after expiry of the prescribed period of limitation.

Analysis: The credit had been reversed before issuance of the demand notices. The demand for interest was raised beyond the limitation period contemplated under Section 11A, and there was no allegation of suppression, misdeclaration or similar misconduct to extend the period. The reasoning also accepted that where interest is recovered under the excise limitation provision, the same limitation applies to such recovery.

Conclusion: The demand for interest was time-barred and could not be sustained. The issue was decided in favour of the assessee.

Ratio Decidendi: A demand for interest connected with reversal of inadmissible credit, when raised under Section 11A of the Central Excise Act, 1944, must be issued within the prescribed limitation period and cannot be sustained when raised beyond that period in the absence of suppression or similar grounds.

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