TMI Blog2015 (5) TMI 1010X X X X Extracts X X X X X X X X Extracts X X X X ..... not sustainable and accordingly, is set aside. - Decided in favour of assessee Demand on the ground that the appellant failed to account for 504 Nos. of personal computers - 504 Nos. of personal computers “recorded excess in their annual accounts than RG 1 Register” were not accounted - Held that:- Learned counsel however could not explain as to why there was an observation about excess recording in the Annual Balance Sheet and why no reconciliation statement was submitted and copy of the relevant registers were also not provided. Even though it is more than 16 years and even now, the appellant did not have all the details. - Decided against assessee. Demand on OMC computer systems supplied against order of the Department of Telecomm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e factory, values were fully reduced (written off) on the basis that the said inputs were in the inventory for longer period belonging prior to 1-3-1986. According to the prescription in Accounting Standard No. 2 (AS-2), the statutory auditors in the process of providing values of the inventory, accounting treatment is provided, whereby the values might be shown as completely written off or they may be partly written off having regard to the period of retention. This prescription has no nexus with the utility of the goods as inputs for the finished goods. That is to say, that a certain goods has always the same utility value as it has when it was first brought into factory for manufacture of final products. 2.3 If the inputs are not foun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the values were completely written off. Only values were reduced; they were not wholly reduced. (iv) There is no clearance of any input goods. Hence there can be no incidence of duty as all the goods are in factory only. (v) The provisions of Modvat scheme or the provisions of Cenvat scheme apply only in cases where goods are cleared from the factory. There is no statutory warrant to issue the subject notices invoking the Modvat or Cenvat provisions. (vi) There is no suppression with any intent to evade duty. Duty is payable only if goods are cleared from factory. Further the company follows (has been following) the practice of reducing values as per AS-2 every year for the past 20 years. The demands are barred by limitatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he factory. 2.6. There were two Circulars issued by the C.B.E. C. Circular No. 101/12/95-CX, dated 22-2-1995 was issued inter alia holding that if credit were to be written off for stock account purposes the credit was required to be reversed/paid back. However on further examination of the matter another Circular No. 645/36/2002-CX, dated 16-7-2002 was issued saying that in respect of cases where values were partially written off, there is no need to reverse credit. 2.7. Learned counsel also relied upon the decision in the case of Commissioner of Central Excise v. Ingersoll Rand (India) Ltd. [2014 (300) E.L.T. 347 (Guj.)]. 3. We find considerable force in the arguments and submissions of the counsel. Prior to amendment of Rule 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uty demand of ₹ 19,94,668/- on OMC computer systems supplied against order of the Department of Telecommunication (DOT), Government of India. It was submitted by the appellant - The prices shown as payable in the purchase orders were amended subsequently and accordingly there were excise duty payments at the time of removal of goods and differential duty payments on receipt of price amendments. The differential duty was paid by way of debiting to PLA/RG 23A Part II and such debits were reflected in the monthly returns. Such differential duty paid was claimed as reimbursement from DOT on the basis of certification by the range Superintendent. Thus, the appellant confirms that there was no short payment of duty on account of the diff ..... X X X X Extracts X X X X X X X X Extracts X X X X
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