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2019 (5) TMI 971 - AT - Central ExciseCENVAT Credit - write off of inputs - denial on the ground that inputs on which such credit was claimed were charged to “Launch expense ledger account” and hence to be considered as written off - period 01.04.2008 to 31.12.2008 - Rule 3 (5B) of the CCR - failure to produce the information about the usage of inputs in the manufacture and maintaining proper records of receipt, disposal and inventory thereof - HELD THAT:- The allegation of non-maintenance of record is not proved. The only allegation made out in the show-cause notice appears to be that such account has not been maintained in the SAP - there are no merit in this argument that the said records should have been maintained in the SAP. The respondent contended that they have mentioned the receipt of inputs and the credit availed thereof in the ER-1 Returns. Therefore, the provisions of Rule 9(5) of CENVAT Credit Rules, 2004 are by and large complied with. Therefore, there are no reason to interfere with the findings of Learned Commissioner as far as the maintenance of record is concerned. Another allegation in the show-cause notice was that the expenses on account of inputs used in the manufacture of pre-launch series of cars was debited to launch material account and the same amounted to writing off - HELD THAT:- This is a mere accounting practice. Law cannot disregard the practices prevalent in the industry. If a particular industry treats such costs as expenses and denotes the same as expenses in the profit & loss account it cannot be held that the same has been written off assuming them to be obsolete. What is to be seen is whether any provisions of Cenvat Credit Rules have been violated. It can be argued only on the basis of accounting standards that the impugned goods are written off. Therefore, the provisions of Rule 3(5B) of CENVAT Credit Rules, 2004 are not attracted. The necessary condition for availing credit is receipt of inputs under the cover of invoice, payment of duty of the same and utilization of the inputs in the manufacture. None of these events have been challenged in the show-cause notice. It is not the case of Revenue that the said inputs have not been received in the factory or not utilized in the manufacture or removed as such from the factory without payment of duty. The Respondents have correctly availed that credit and as rightly held by the Learned Commissioner, the Respondents need not reverse and credit in his regard - Appeal dismissed - decided against Revenue.
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