Rule 14 – Recovery of CENVAT credit wrongly taken and utilised or erroneously refunded :

The provisions of the rule 14 are discussed hereunder:

(a) Where CENVAT credit has been taken wrongly but not utilised, the same will be recovered from the manufacturer/ output service provider in accordance with the provisions of section 11A of the Central Excise Act, 1944/ section 73 of the Finance Act, 1994 [Clause (i) of sub-rule (1)].

(b) Where CENVAT credit has been taken and utilised wrongly or has been erroneously refunded, the same will be recovered along with interest from the manufacturer/ output service provider in accordance with the provisions of sections 11A and 11AA (interest @ 18% for excise duty) of Central Excise Act, 1944/ sections 73 and 75 (graded interest ranging from 18% to 30% for service tax) of the Finance Act, 1994 [Clause (ii) of subrule (1)].

(c) For this purpose, all credits taken during a month will be deemed to have been taken on the last day of the month and the utilisation thereof will be deemed to have occurred in the following manner, namely: –

(i) the opening balance of the month has been utilised first;

(ii) credit admissible in terms of these rules taken during the month has been utilised next;

(iii) credit inadmissible in terms of these rules taken during the month has been utilized thereafter.