TMI Blog2016 (3) TMI 434X X X X Extracts X X X X X X X X Extracts X X X X ..... 2029/05 - - - Dated:- 9-2-2016 - S. S. Garg, Member (J) And Raju, Member (T) For the Appellant : Shri MPS Joshi, Adv For the Respondent : Shri. Ajay Kumar, Jt. Comm. (AR) for Respondent ORDER Per Raju 1. The appellants are manufacturers of motor vehicles and parts thereof. During the period 2000-2003 the appellants had written off certain inputs in their balance sheet as the same were considered non-moving and obsolete. The revenue sought to recover the Cenvat Credit availed on the said goods on the grounds that the same have not been used for the manufacture of dutiable final products. The demands for Cenvat Credit was confirmed by the Commissioner relying on the CBE C Circular No. 645/36/2002-CX dated 16/07/2002 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se where the inputs are lying in the factory, they had been written off in the accounts, the credit cannot be denied. The facts of the present case are different from the case relied upon by the appellants. In the present case the adjudicating authority gave a specific finding of fact that inputs were not physically available even after being written off from the account nor there is any evidence that the goods were used in the manufacture of the final products. In view of the above discussion, we find no interference in the impugned order whereby the benefit of Modvat credit was denied to the appellants. However, taking into facts and circumstances of the case, the penalty of ₹ 50,000/- (Rupees fifty thousand only) under Rule 173Q an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nputs at the time of writing off in the financial records, which have been written off in the financial records as obsolete or not. 13. To decide the issue, we have to go through the provisions of law, which deals such a situation and Rule 3(5) of Cenvat Credit Rules, 2004 deals with the situation, which is reproduced herein as under: (5) When inputs or capital goods, on which CENVAT credit has been taken, are removed as such from the factory, or premises of the provider of output service, the manufacturer of the final products or provider of output service, as the case may be, shall pay an amount equal to the credit availed in respect of such inputs or capital goods and such removal shall be made under the cover of an invoice referre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /2005-C.E. (N.T.), dated 16-5-2005] (5B) If the value of any, (i) input, or (ii) capital goods before being put to use, on which CENVAT Credit has been taken is written off fully or where any provision to write off fully has been made in the books of account, then the manufacturer shall pay an amount equivalent to the CENVAT credit taken in respect of the said input or capital goods: Provided that if the said input or capital goods is subsequently used in the manufacture of final products, the manufacturer shall be entitled to take the credit of the amount equivalent to the CENVAT Credit paid earlier subject to the other provisions of these rules. [Inserted vide Notification No. 26/2007-Central Excise (N.T.), dated 11-5-20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the facts of this case as held by the Hon'ble Bombay High Court on Hindalco Industries Ltd. case cited supra. In case's of M/s. Kinetic Motors Co. Ltd., cited supra, Jindal Vijayanagar Steel Ltd., cited supra and AUDCO India Ltd., cited supra, this Tribunal has, time and again, held that demand of duty or reversal of Cenvat Credit cannot be made in respect of inputs or capital goods although they have become obsolete but are lying in the said factory; duty is payable only at the time of removal of such inputs. The case laws cited by the Ld. JCDR in the case of RPG Cables Ltd., cited supra is not relevant to the facts of this case. In that case it was admitted that the inputs were not physically available in the factory after being w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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