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2022 (4) TMI 1359 - AT - Central ExciseReversal of CENVAT Credit - slow-moving inventory, considering closing balance as on 31.03.2017 - it is claimed that provision for slow moving inventory made to write off their value in books of account require reversal of Cenvat credit on the said inputs - Rule 3(5B) of the Cenvat Credit Rules, 2004 - revenue neutrality - HELD THAT:- The appellant have only created a general provision for slow-moving inventory and have actually not written off the inventory from the inventory or the asset account. In actuality such provision have been made by appropriation in the profit and loss account, without writing off any amount from the assets / inventory account. Rule 3(5B) of the Cenvat Credit Rules is attracted only when the value of the assets and/or inventory is written off fully or partially or wherein any specific provision to write off fully or partially has been made in the books of account. In the facts of the present case, the appellant have made a general provision, which is not attributable to any particular assets / inventory - Admittedly, Revenue has not been able to identify the details of inventory or asset, for which the general provision has been made. It is further evident that appellant have led evidence that such provision has been varied from year to year by way of writing back, on the usage of the inventory as required. Revenue Neutrality - HELD THAT:- The situation is revenue neutral as the appellant have written off the majority of the provision created on utilisation of the inventory in manufacturing and clearance of finished goods. Appeal allowed - decided in favor of appellant.
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