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2013 (2) TMI 32 - HC - Central ExciseReversal of Cenvat Credit – Rule 5B of the CCR, 2004 - Written off input or capital goods or any provision thereof – Whether writing off certain inputs either partially or fully in its books of accounts for the income-tax purpose, also required to reverse CENVAT credit taken on such inputs – Rule 57A – Circulars dated 22-2-1995 and 16-7-2002 Held 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. Merely because the value of goods diminished in the books of accounts 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 Reduction of the value of such spares (inputs) for income-tax purpose, cannot be equated with writing off of the physical stock. The accounts maintained by the manufacturer for the income-tax purpose stand on an entirely different footing and would have to follow the accounting standards prescribed under the law. If under such accounting principles, the assessee is entitled to diminish the value of a certain stock held over a period longer than the specified period, the same has no correlation with the availability of physical stock insofar as the manufacturing activity is concerned In absence of such statutory provisions, merely on the strength of the Board's circulars, it would not be open for the Department to enforce reversal of CENVAT credit. In favour of assessee
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