Interest and Penalties Justified for Wrong CENVAT Credit Use: Sections 77, 78, and Rule 14(1) Explained.

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....Recovery of interest and imposition of penalty under Sections 77 & 78 is justified - Rule 14(1)(i) of CENVAT Credit Rules, 2004 provides that where the CENVAT Credit had been taken wrongly but not utilized, the same shall be recovered under the provisions of Section 11A of the Central Excise Act, 1944 and Section 73 of the Finance Act, 1994 as the case may be. Further Rule 14(1)(ii) provides that where CENVAT Credit has been taken and utilized wrongly or has been erroneously refunded the same shall be recovered along with interest - there is clear distinction made in the statute that interest is to be recovered only in case of utilization of CENVAT Credit taken wrongly. - AT....