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2016 (6) TMI 469 - CESTAT CHANDIGARH

2016 (6) TMI 469 - CESTAT CHANDIGARH - TMI - Requirement of reversal of Cenvat credit - finished goods which have been written-off - Rule 3(5B) of the Cenvat Credit Rules, 2004 Held that:- there is no provision for reversal of cenvat credit on inputs/ components which have been used in the manufacture of final product. In fact, as per Section'3 of the Central Excise Act, 1944, the goods manufactured by an assessee are to be cleared on payment of duty, therefore, reversal of cenvat credit on fi .....

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tten-off but inputs and components were not actually not written off by the appellant. Further, the appellant has used these inputs and components later on, in the manufacture of final goods, in that circumstances, as per provision of Rule 3 (5B) appellant is entitled to take cenvat credit on these inputs and components. Therefore, appellant is not required to reverse cenvat credit on inputs/ components for which they have made provision in the balance sheet.

Invokation of extended p .....

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red.

Applicability of Rule 14 of Cenvat Credit Rules, 2004 Held that:- it is found that the appellant had taken cenvat credit correctly on inputs/ components at the time of procurement thereof and there is no allegation in the show cause notice that appellant has wrongly taken cenvat credit. Therefore, the provision of Rule 14 of Cenvat Credit Rules, 2004 are not applicable to the facts of the case. Decided in favour of appellant with consequential relief - Excise Appeal No. 53 .....

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year 2010-11 and 2011-12, the appellant has made certain provision for writing of the finished goods on the basis of the actual price of the case in the market. The appellant has also made certain provisions for inputs and components. On the basis of the audit conducted by the department show cause notices dated 06.09.2012 and 19.07.2013 were issued for the period 2010-11 and 2011-12 respectively to direct the appellant to reverse the cenvat credit on inputs and components used in manufacture of .....

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en written off in the balance sheet. It is also submitted that the appellant has made provisions for inputs and components but they have not been written-off and these inputs and components have been further used by the appellant in manufacture of the final goods, therefore, as per the proviso to Rule 3(5)(b) of the Cenvat Credit Rules, 2004, the appellant cannot be asked to reverse cenvat credit. Ld. Counsel also submits that during the impugned period, the appellant was in the activity of manu .....

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efore extended period of limitation is not invokable. She also relied on the decision of the Tribunal in the case of CCE&ST, Rohtak vs. M/s Park Nonwoven Pvt. Ltd. -2015 (10) TMI 423- CESTAT, New Delhi to say that CBEC Circular No. 907/27/09-CE dated 7.12.2009 is contrary to the judicial pronouncement and Rule 3(5)(b) of the Cenvat Credit Rules, 2004, therefore, impugned order is to be set aside. 3. On the other hand, ld. DR reiterated the findings in the impugned order. 4. Heard the parties .....

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appellant is required to reverse cenvat credit on inputs/ components for which provision has been made in the balance sheet but not actually written-off or not? (iv) whether the subsequent show cause notice can be issued by invoking extended of limitation or not? (v) Whether in the facts and circumstances of the case provision of Rule 14 of Cenvat Credit Rules, 2004 are applicable or not? 6. Issue No. (i) Whether as per Rule 3(5B) of the Cenvat Credit Rules, 2004 appellant is required to reverse .....

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y 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 or the provision of [output services], the manufacturer or output service provider, as the case may be, 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]" On going through the said provision, I fin .....

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which have been used in the manufacture of finished goods which ultimately written-off by the appellant. Therefore, Issue No. (i) is answered in favour of the appellant. Issue No. (ii) Whether the appellant is required to reverse the cenvat credit on the traded goods on which no credit has been taken or not? As no cenvat credit has been taken by the appellant on traded goods, in that circumstances reverse of cenvat credit on those goods does not arise. Therefore Issue No. (ii) is answered in fa .....

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