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2015 (1) TMI 30 - CESTAT NEW DELHICENVAT Credit - Cenvat credit in respect of certain items of spares of capital goods - writing of the slow moving capital goods spares - notification no. 26/07 CE (NT) sub-rule 5B - Reversal of CENVAT Credit - Penalty u/s 11AC - Held that:- provision for writing off of slow moving spares was made for the first time in December, 2006 and the Cenvat credit availed in respect of the spares was of ₹ 8,82,465 - as the writing of inputs/ capital goods and making provision for writing off of inputs/capital goods cannot be equated. In this case, while at the time of making provision for writing off of slow moving spares in December 2006, Rule 3(5B) was not there, this sub-rule had come into force when the provision for writing off was carried forward in the next financial year and at that time, the Cenvat credit should have been reversal. - amended provisions of Rule 3(5B) effective from 1.3.11 cannot be applied retrospectively. Therefore, if the appellant's claim that the provision made by them was for partial writing off of slow moving spares and not for full writing off, there would be no requirement to reverse the credit . The appellant's plea is that they had furnished evidence in this regard along with reply to show cause notice, but the same has not been considered. The impugned order is therefore set aside and the matter is remanded to the original adjudicating authority for de novo adjudication. In the course of de novo proceedings, the appellant's plea that the provision made by them December 2006 and carried forward to subsequent financial years was for partial writing off and not for full writing off of slow moving spare is to be examined and if their claim is found to be correct, they would not be required to reverse the Cenvat credit. - Decided in favour of assesse.
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