2022 (11) TMI 1001 - AT - Central Excise
Reversal of CENVAT Credit - removal of inputs as such - provision for slow/non-moving inventory made - whether the provisions of Rule 3(5)(B) of CCR, 2004 are attracted in case of making a general provision in the books of account for slow moving/non moving inventory, without reducing the value of such inventory?
HELD THAT:- The appellant have only created a general provision for slow/non-moving inventory and have admittedly not written of 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 of any amount/value from the asset/inventory account - Rule 3(5B) of CCR is attracted only when the value of the asset and/or inventory is written off fully or partially or wherein any specific provision to write off a 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 asset/inventory.
Admittedly, revenue have not been able to identify the details of inventory or asset, for which the general provision has been made. It is further evident that the appellant have demonstrated that such provision has been made year to year by way of increasing or reducing the provision, depending on the usage of inventory as required.
The impugned order is set aside - The ground of limitation raised is left open - appeal allowed.