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

Interest and penalty depend on whether wrongly availed cenvat credit was utilised or timely reversed under the existing rule.
Levy of interest and penalty for wrongly availed Cenvat credit depends on utilisation and timing of reversal: earlier practice permitted levy even without utilisation, though voluntary reversal before detection could negate liability; under the later rule interest and penalty apply only if the wrongly availed credit was utilised, and interest is computed from utilisation to reversal.