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2016 (11) TMI 1284 - AT - Central ExciseReversal of CENVAT credit - Rule 3(5B) of the Cenvat Credit Rules, 2004 - availing credit without paying duty to the supplier - amount booked as extraordinary income - Held that: - The appellants having decided not to make payment to the vendors, for whatever reason that may be, it is equal to a situation of writing off the inputs especially when they have accounted the amount as ‘extra-ordinary income’. This income amount includes the duty portion of the goods also. Therefore, appellant ought to have reversed the credit along with interest as they have not paid the duty on the goods. The facts reveal that the appellant have attempted to avail credit without paying duty in the guise of accounting the same as ‘extra ordinary income’. The availment of credit without paying duty on the goods has resulted in a situation of loss of revenue. The facts of the case present an isolated situation and the contention of the appellant that writing off of the dues to the vendor is not the same as writing off of inputs and that Rule 3(5B) is not applicable is not tenable. Circular No.877/15/2008-CX dated 17-11-2008 regarding reversal of Cenvat credit in the case of trade discount, and therefore, is not at all applicable. Be that as it may, the circular clarifies that by way of discount if price is reduced and consequently duty is also reduced, the reduced excise duty only will be available as credit. In the present case, the appellant not having paid the duty, the credit cannot be availed at all. Appeal dismissed - decided against appellant.
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