Facts :

• Petitioner wrongly transitioned balance from Personal Ledger Account as input tax credit under Section 140 of CGST Act.
• Refund was sanctioned, but ₹9,25,366 was adjusted towards interest on such utilization.
• Petitioner contended that sufficient Input Tax Credit was available and there was no loss to revenue.
• Dispute arose on legality of interest adjustment while granting refund.

Court Decision:

• Petitioner ought to have claimed refund under Section 11B of Central Excise Act read with Section 142(3) of CGST Act.
• Wrong transition of credit was acknowledged, but tax liability was subsequently squared up using available Input Tax Credit.
• There was no loss to revenue, as sufficient credit existed.

Directions:

• Deduction of ₹9,25,366 towards interest held unsustainable.
• Impugned order modified to that extent.
• Respondent directed to refund ₹9,25,366 to petitioner.
• Refund to be made within 8 weeks.