TMI Blog2017 (4) TMI 381X X X X Extracts X X X X X X X X Extracts X X X X ..... eet and not reversing the CENVAT Credit thereon. As per this conduct of the appellant, it is clear case of suppression of facts, therefore, extended period was rightly invoked by the Department - extended period invoked. Penalty u/s 11AC also consequently imposable. Appeal dismissed - decided against assessee. - E/1095/10 & E/345/11 - A/86616-86617/17/SMB - Dated:- 31-3-2017 - Shri Ramesh Nair, Member ( Judicial ) Ms. Anjali Hirawat, Advocate for Appellant Shri N.N. Prabhudesai, Supdt. (AR) for Respondent ORDER Per Ramesh Nair The issue involved in the present case is whether the CENVAT Credit in respect of inputs and its value shown in the Books of Account as written off is required to be reversed or otherwise. 2. Ms. Anjali Hirawat, learned Counsel appearing on behalf of the appellant submits that as per sub-rule (5B) of Rule 3 of the Cenvat Credit Rules, 2004, the credit is required to be reversed only in case where the CENVAT Credit in respect of inputs has been taken as written off and shown in the Books of Account, but if the inputs were subsequently used in the manufacture then the credit is admissible. She submits that in the present ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Lear Automotive India Pvt. Ltd. Vs. CCE, Nashik 2012 (286) ELT 558 (Tri-Mum). 3. Shri N.N. Prabhudesai, learned Supdt. (AR) appearing on behalf of the Revenue reiterates the findings of the impugned order. He further submits that even before insertion of sub-rule (5B) in Rule 3 of Cenvat Credit Rules, this Tribunal has taken the decision that quantity of input written off in the Books of Account, credit attributed to such quantity of goods is to be reversed. In the appellant's own case, the period involved was prior to insertion of sub-rule (5B). He submits that as regard limitation, it is not a regular practice that the appellant is writing of the quantity of inputs showing in the Books of account. It depends upon the factual position where there is shortage or otherwise for the purpose of showing the quantity of written off inputs. Therefore, it is based on the facts from time to time and the said fact is known to the appellant only. Even when the Tribunal has decided the identical case against the appellant, they kept on showing the written off quantity in the Books of Account. Therefore, there is clear suppression of facts. This is not a legal issue, which is recurring ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thereafter actual shortages or excesses are worked out and then reflected in the accounts. In his statement dated 5-2-2004, Shri Milind Jadhav also confirmed the fact that the cycle count of physical verification of stocks with recorded stock showing effect of excesses or shortages in inventory are taken into account and then net effect is reflected in trial balance sheet. Thus from the stock verification, the Commissioner has also noted that in the Auditor's Reports for the financial year 31-3-1999 to 31-3-2004 the Auditors have given their opinion that, the procedure of physical verification of the inventories followed by the management as reasonable and adequate in relation to the size of the company and the nature of the business, and that the valuation of the inventories is fair and proper in accordance with the generally accepted accounting principles. Thus from the stock verification as also from the reports of auditors, it was evident that certain inputs which were found short during the stock verification were written off from the books of accounts and the values of such shortages of inputs are shown in trial balance sheet and profit and loss account only after compila ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut and then reflected in the books of accounts. Thereafter the raw materials found short are written off in the books of accounts. While doing so, the appellant has not reversed the Cenvat credit taken on the raw materials found short. It is not the case of the appellant that they have involved the central excise staff in the physical stock taking nor have they intimated the shortages noticed to the excise department. As per C.B.E. C. Circular dated 22-2-1995, when the assessee writes off the materials in their books of accounts, it is obligatory on the part of the assessees to straight away reverse the Modvat credit taken under intimation to the Range Officers concerned. This position was reiterated in the circular dated 16-7-2002. Such instructions/circulars are brought to the notice of the trade by way of trade notices. Under Section 37(2)(xx) of Central Excise Act, 1944, the C.B.E. C. and the Commissioner of Central Excise are empowered to issue written instructions for enforcement of the provisions of the Act and the rules made thereunder. Such instructions have statutory force and have to complied with by the assessees. In the instant case, the appellant has not complied ..... X X X X Extracts X X X X X X X X Extracts X X X X
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