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2016 (6) TMI 469

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..... een taken – Held that:- as no cenvat credit has been taken by the appellant on traded goods, reversal of cenvat credit on those goods does not arise. Requirement of reversal of Cenvat credit - inputs/ components - provision has been made in the balance sheet but not actually written-off – Held that:- appellant has made a provision for written-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 .....

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..... t is manufacturer of excisable goods and availing cenvat credit on inputs and components. In the balance sheet of the financial 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 the finished goods for which provision has been made by the appellant for written off in their balance sheet. The show ca .....

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..... E 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 and considered the submissions. 5. After hearing the parties I find that following issues have been raised by the ld. Counsel for the appellant which are incorporated herein below: (i) Whether as per Rule 3(5)(b) of the Cenvat Credit Rules, 2004 the appellant is required to reverse cenvat credit on finished goods which have been written-off or not? (ii) W .....

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..... 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 find 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 finished goods does not arise; at the most, duty can be demanded. In that circumstances, I hold that the appellant are not required to reverse the cenvat credit on inputs/ components which have been used in the manufacture of finished goods which ultimately writ .....

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..... ce for the period 2005-08 to 2008-09 was issued on 05.04.2010, therefore, both the show cause notices issued in question to the appellant by invoking extended period are barred of limitation. Therefore, the show cause notices are not sustainable in the eyes of law. Accordingly, the impugned proceedings are set aside as time barred. This issue is also answered in favour of the appellant. Issue No. (v) Whether in the facts and circumstances of the case provision of Rule 14 of Cenvat Credit Rules, 2004 are applicable or not? I find 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. .....

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