CENVAT credit, interest on unutilised credit, and penalty under Rule 14 were examined, with major relief granted.

CENVAT credit on services such as renting of immovable property, chartered accountant, repairs and maintenance, advertisement membership and travelling services was examined under Rule 2(l) of the Cenvat Credit Rules, 2004, with credit sustained for admissible services and the assessee's concession accepted for general insurance services. Under Rule 14, as amended from 01.04.2012, interest was treated as recoverable only where wrongly availed credit was both taken and utilised; since the disputed credit was not utilised and substantial credit balance remained, interest was not payable. Penalty was deleted because the dispute arose within the normal period, most of the credit was allowed, and there was no suppression or mala fide intent.

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Issues: Whether CENVAT credit was admissible on the disputed input services; whether interest was payable when the wrongly availed credit was not utilized; and whether penalty was leviable.

Analysis: The disputed credit related to services such as renting of immovable property, chartered accountant services, repairs and maintenance, advertisement membership, and travelling services. The matter was governed by the scope of input service under Rule 2(l) of the Cenvat Credit Rules, 2004, and the Tribunal followed its earlier view in the assessee's own case to sustain credit on the admissible services while accepting the concession made in respect of general insurance services. On interest, the Tribunal applied Rule 14 of the Cenvat Credit Rules, 2004 as amended from 01.04.2012 and held that interest is chargeable only when credit is both availed and utilized. As the assessee maintained substantial credit balance and the disputed credit was not utilized, interest was held not payable. On penalty, the Tribunal noted that the dispute was raised within the normal period, the major part of the credit claim was allowed, and there was no suppression or mala fide intent, making the dispute debatable.

Conclusion: The credit demand was sustained only to the extent conceded by the assessee, interest demand was set aside, and penalty was deleted.

Final Conclusion: The assessee obtained substantial relief, with only the admitted credit disallowed and the consequential interest and penalty demands annulled.

Ratio Decidendi: CENVAT credit may be denied only to the extent conceded or found inadmissible, and where wrongly availed credit is not utilized, interest is not recoverable under the amended rule governing availed and utilized credit; penalty is unwarranted in the absence of suppression or mala fide intent.

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