Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Articles Highlights TMI Notes SMS News Newsletters Calendar Imp. Links Database Experts Contact us More....
Extracts
Home List
← Previous Next →

Force Motors Ltd. Versus CC, CCE & ST, Indore

2017 (5) TMI 813 - CESTAT NEW DELHI

Reversal of CENVAT credit - inputs written off - Revenue's case is that the written off unit as recorded is actually removal of inputs as such - Held that: - Once it is recognized and established that the inputs have been put to intended purpose, it is not relevant whether some of them get damaged or rejected during the course of manufacture. Such damaged input/rejection resulting in scrapping of such inputs will have no impact on the credit availed on them - In the present case, admittedly, the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

y put in the process of manufacture is already held in many cases earlier. - Denial of credit not justified - appeal allowed - decided in favor of appellant. - Excise Appeals Nos. 50325 and 50326/2017-EX (SM) - Final Order No. 53283-53284/2017 - Dated:- 8-5-2017 - Shri B. Ravichandran, Member (Technical) Shri S. A. Gundecha, Advocate for the appellant Shri K. Poddar, DR for the respondent ORDER Per B. Ravichandran These two appeals are against order dated 18.11.2016 of Commissioner (Appeals- .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

en off . Based on the examination of the trial balance for the year 2000-2001 to 2003-04, it appeared that the appellants have written off various amounts of value of inputs, by debiting material loss, bought out rejections, scraped in their books of accounts. The Revenue initiated proceedings against the appellants for recovery of the credit availed on these inputs, the value of which was shown as written off in their books of accounts. Various show cause notices were issued covering the period .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

oints:- (a) From the beginning, the appellants have been contesting their liability to reverse any credit on these inputs. He explained that the appellants received large number of duty paid inputs from various vendors. They scrutinized and checked-up standards and qualities of inputs, before taking into account the stock to be used for further manufacture. The inputs, which are not meeting the standards are returned and the credit taken on such inputs are reversed. Some of the inputs, which are .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

for credit of duty paid on them. (c ) During the course of manufacturing process, due to various reasons some of the inputs are found either unfit or not upto the mark, due to various technical reasons and are not used by the concerned manufacturing sections. In such cases, there is no need to reverse the credit on such inputs as they have been used for intended purpose and however, could not become part of the final product as they get damaged or rejected during the course of manufacturing proc .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nd to be damaged or get damaged and such inputs were added in the product non-conformity note , which was later entered into their system. The value of such inputs are written off as per the Standard Accounting Procedure. The scrap value is added as and when realized, into the credit of their accounts. The inputs may get scrapped due to various reasons like mis-handling by workers, process trial, destructive testing, etc. All these are part of manufacturing process and this scrap so generated an .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

sel contested the demand for extended period and also imposition of penalty. The whole case is based on the records maintained by the appellants. There is no sustainable ground for the allegation of suppression, mis-statement, etc. 7. Ld. AR contested the grounds of appeal. He stated that the complete write off of the value of the inputs will clearly indicate that the said inputs were not put to use in the process of manufacture. It is for the appellant to establish that these inputs were put to .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

take credit on various inputs is not in dispute. If the inputs are used in the manufacture of final products, the credit can be righty availed and used. The dispute in the present appeals relates to the allegation that some of the inputs have not been put to the intended use and as such, the credit availed on them should be reversed. The basis of the allegation is that the appellant in their books of accounts, written off the value of some inputs, by debiting material loss of bought-out rejecti .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

acture. Such damaged input/rejection resulting in scrapping of such inputs will have no impact on the credit availed on them. In other words, the eligibility of the credit on the inputs, which are in fact put to intended use, cannot be questioned for any other reason. In the present case, admittedly, the appellant written off the full value of some of the inputs stating that these are material loss of bought out items, which are rejected/scrapped. The accounts maintained by the appellant to this .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

defects in the components like crack, heavy scratch, not of specification, etc. These are found during the usage of these duty paid inputs. The process of such rejection or damage during the course of manufacture of final products, like motor vehicles, is not uncommon. It is not correct to state that all the inputs on which credit has been taken, should ultimately form part of the final dutiable products. There will be certainly some damage, scrapping/rejection during the course of manufacture. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

what is new what is new
  ↓     bird's eye view     ↓  


|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version