Cenvat credit restoration follows removal of utilization restriction; consequential interest and penalty could not survive.

The amendment to the Cenvat Credit Rules removed the earlier restriction on using AED (GSI) credit for payment of other excise duties, and credit legitimately earned on duty-paid inputs was therefore required to be restored. The Tribunal also treated the issue as governed by binding precedent in the assessee's own case, and distinguished the Larger Bench refund ruling as inapplicable on these facts. On that basis, the disallowance of credit, along with the consequential interest and penalty, was held unsustainable.

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Issues: Whether the assessee was entitled to restoration and utilization of Cenvat credit of Additional Duty of Excise (GSI) earlier reversed or paid through PLA, and whether the demand of credit, interest, and penalty could be sustained.

Analysis: The dispute turned on the effect of the amendment to the Cenvat Credit Rules permitting utilization of AED (GSI) credit for payment of other excise duties and the subsequent legal position affirmed in the assessee's own case by the High Court. The credit had been legitimately earned on duty-paid inputs, and the earlier restriction on utilization stood removed by the relevant amendment. The Tribunal treated the matter as covered by binding precedent and accepted that the credit required restoration, with the distinction drawn from the refund-related Larger Bench decision being inapplicable to the present facts.

Conclusion: The disallowance of credit, consequential interest, and penalty were not sustainable, and the assessee succeeded on the issue.

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