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2019 (3) TMI 857 - AT - Central ExciseCENVAT Credit - write off of inputs partially or fully - Whether upon an assessee writing off certain inputs either partially or fully in its books of account for the income-tax purpose, he is also required to reverse Cenvat credit taken on such inputs? - Held that:- The Cenvat credit was available as provided under Rule 57A. Sub-rule (1) thereof provides that the provisions of this Chapter [which is Chapter V(AA) pertaining to credit of duty paid on excisable goods used as inputs] shall apply to such finished excisable goods as may be notified by the Central Government for the purpose of allowing credit on any duty of excise or additional duty as may be specified in such notification paid on the goods used in the manufacture of the said final products. Rule 57F provided for the manner of utilisation of inputs and the credit allowed in respect of duty paid thereon. It can be seen that the liability of the assessee to pay duty equal to the amount of credit availed in respect of a particular input would arise at the time of the removal of the inputs for home consumption. This rule did not envisage reversal of Cenvat credit even before removal of goods. There was no provision under which the cenvat credit already taken under the Rules of 1944 could be directed to be reversed simply because the input goods were not utilised for a certain period of time. We also note that there is significant difference in the accounting approach for the income-tax purpose and the approach for stock maintenance for the purpose of manufacturing activities relevant for the question of excise. Therefore, merely because the value of goods diminished in the books of account of the assessee would not by itself permit the Department to insist on reversal of the credit particularly when such goods were still available in the factory in usable condition. The reversal of the credit would amount to collection of duty which would be wholly unauthorised. The Board’s circular could not have created a liability which did not exist under the rules - appeal allowed - decided in favor of appellant.
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