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2023 (11) TMI 889 - AT - Central ExciseCENVAT re-Credit on inputs, provisionally written off in the books of accounts - Rule 3(5B) of CENVAT Credit Rules, 2004 - invocation of extended period of limitation - interest - penalty. It appeared to the department that the CENVAT credit on Obsolescent material which was earlier debited, was taken back on 30.06.2017, without utilising the same in the manufacture of final products. HELD THAT:- The Appellant have availed CENVAT re-credit of Rs.34,84,905/- on 30.06.2017 on the inputs which were provisionally written off earlier and carried forward the same in ER 1 return filed prior to introduction of GST in terms of Section 140(1) of the Act as transitional credit. It is pertinent to note that the material on which CENVAT credit was availed was not fully written off. In terms of provisions of Rule 3(5B) of erstwhile CENVAT Credit Rules, 2004, any assessee is entitled to take re-credit if the said inputs/ capital goods are subsequently put to use in the manufacture of final products and which have not been fully written off - In the instant case, the Appellant has provided documents pertaining to the utilisation of inputs in the manufacture of final products. The provisions of Rule 3(5B) of erstwhile CENVAT Credit Rules, 2004 are very clear which states that when said inputs or capital goods are subsequently used in the manufacture of their products, the manufacturer is entitled to take the credit of the amount equivalent to the CENVAT Credit paid earlier. Extended period of Limitation - HELD THAT:- In the instant case, the appellant has provided sufficient documentary evidence pertaining to the utilisation of inputs in the manufacture of their final products. As such, the demand of alleged ineligible CENVAT Credit cannot sustain. As the issue is of interpretational in nature, invocation of extended period is not justified as the ingredients required for extending the limitation are not satisfied in this case. Interest and penalty - HELD THAT:- As the demand cannot sustain, imposition of penalty and demand of interest also cannot survive. However, it is to be observed that the Departmental authorities are free to verify the utilisation of the impugned inputs whether used or not in the manufacture of their finished products by the appellant. The impugned order set aside - appeal allowed.
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