Interest on wrongly availed Cenvat credit remained recoverable despite delayed reversal and no prior show cause notice.

Interest on wrongly availed and belatedly reversed Cenvat credit was treated as automatically payable on delayed reversal, and the absence of a prior show cause notice did not defeat recovery. The earlier view that payment before notice could avoid interest was treated as no longer good law in light of later authority and the amended statutory scheme. The credit rules were read as supporting interest on wrongful availment followed by delayed reversal, so the interest demand was upheld.

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Issues: Whether interest on wrongly availed and belatedly reversed Cenvat credit was recoverable even though no show cause notice was issued before demanding interest.

Analysis: Interest liability on delayed reversal of irregularly availed credit was held to be automatic. The earlier view that payment before issue of show cause notice could defeat interest was treated as no longer good law in light of later authority and the amended statutory scheme. The relevant credit rules also supported recovery of interest on wrongful availment and delayed reversal.

Conclusion: The demand of interest was sustainable without a prior show cause notice, and the challenge to the impugned order failed.

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