Court rules in favor of appellant, finding interest demand not sustainable. Impugned order set aside.

The court allowed the appeal, ruling in favor of the appellant, holding that the demand of interest against them was not sustainable. The impugned order was set aside, and the appeal was allowed.

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Issues: Appeal against demand of interest confirmed by invoking extended period of limitation.

Analysis:
1. Facts of the Case: The appellant appealed against an order confirming the demand of interest due to inadmissible Cenvat credit taken by them during the audit period of October 2006 to March 2011. The appellant reversed the credit upon audit findings and was later issued a show cause notice in November 2013 to demand interest for the intervening period.

2. Appellant's Submission: The appellant argued that they had a sufficient balance in their Cenvat account during the period in question and did not utilize the inadmissible credit. They contended that since the credit was reversed, they should not be liable to pay interest. They also raised the issue of the show cause notice being time-barred based on a decision of the Hon'ble High Court of Punjab & Haryana.

3. Revenue's Argument: The Authorized Representative argued that there is no specific time limit for interest payment in the statutory book. They asserted that the appellant is required to pay interest automatically upon reversing the inadmissible Cenvat credit.

4. Court's Decision: The court considered the appellant's contention regarding maintaining a sufficient balance in their Cenvat credit account. Referring to a decision of the Hon'ble High Court of Karnataka, the court held that if the appellant had a sufficient balance, they should not be liable to pay interest. Additionally, the court noted that the show cause notice was issued beyond the period of limitation, as per the decision of the Hon'ble High Court of Punjab & Haryana. Therefore, the court concluded that the demand of interest was not sustainable and set aside the impugned order.

5. Conclusion: The court allowed the appeal, ruling in favor of the appellant and holding that the demand of interest against them was not sustainable. The impugned order was set aside, and the appeal was allowed.

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