PENALTY AND INTEREST ON REVERSAL OF CENVAT CREDIT WRONGLY AVAILED.

[VINOD KUMAR]

GOOD EVENING RESPECTED EXPERTS. SIR, Whether a assessee who has reversed wrongly availed cenvat credit on own is liable to penalty and interest in the following situations:-

1. Date of taking credit is January 10, 2012 and date of reversal is December 16, 2014. But the assesse has not utilized the wrongly availed cenvat.

2. Date of availment is June 10,2012 and date of reversal is December 16 2014. The assesse has not utilized the wrongly availed cenvat. What will happen had the assesse utilized the wrongly availed cenvat in both situations. Pl. Reply. Thanks and regards.

AI Summary

Reversing Unutilized CENVAT Credit May Avoid Penalties; Interest Applies if Credit Utilized Before Reversal An inquiry was made regarding the liability for penalty and interest when an assessee reverses wrongly availed CENVAT credit. Two situations were discussed: in the first, credit was taken in January 2012 and reversed in December 2014 without utilization; in the second, credit was taken in June 2012 and also reversed in December 2014 without utilization. Responses indicated that if the credit was not utilized, interest and penalty might not apply, especially if reversed before detection by authorities. However, if the credit was utilized, interest and penalty would be applicable, with interest calculated from utilization to reversal.