TMI Blog2014 (9) TMI 1160X X X X Extracts X X X X X X X X Extracts X X X X ..... ld.CIT(A) was not right in disallowing the claim. AO is directed to allow the amount as claimed, subject to assessee furnishing the details of credit year wise and other excise registers/forms to establish that Cenvat credit was available to it, before writing off the same. Accordingly, grounds raised by the assessee are allowed. - ITA.No.699/Hyd/2012 - - - Dated:- 16-9-2014 - SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICAL MEMBER For the Appellant : Mr. D. Balaji For the Respondent : Mr. R. Mohan Reddy ORDER PER B. RAMAKOTAIAH, A.M. This appeal by assessee is directed against the Order of the Ld. CIT(A)-V, Hyderabad dated 28.02.2012. The issue in this appeal is with reference to CEN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so in the inventory in terms of provisions of section 145A. This has a neutralizing effect. The amount under consideration is statutory amount due to the assessee which can be used to set off duty payable on the finished goods. The assessee has not demonstrated as to how the cenvat credit available cannot be availed set off during the year so as to write it off. Under the circumstances, the writing off of cenvat credit does not appear to be in order, and therefore, the deduction claimed under cenvat written off is disallowed. 3. Before the Ld. CIT(A), assessee argued that the company is loosing money/credit on account of rate differential between input and output excise duty. As this phenomena is going on year after year, the incomes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re, Ld. CIT(A) was wrong in not allowing it as bad debt. Even otherwise, the same is allowable as business loss. He relied on the principles laid down by the Hon ble Supreme Court in the case of Woodward Governor India P. Ltd., 312 ITR 254. Learned further A.R. relied on the following case laws : (i) M/s. Mohan Spinning Mills vs. ACIT ITA.No.1212/Chd /2011 dated 25.04.2012 (ii) Girdhar Fibres P. Ltd., vs. ACIT ITA.No.2027/Ahd /2009 dated 12.10.2012. (iii) ACIT vs. Rangoli Industries P. Ltd., ITA.No.1936/Ahd /2010 dated 11.01.2013 6. Having heard the submissions of both the sides and considering the facts of the case as narrated before the authorities, it was observed that the aforesaid amount of the Excise Duty credit (CENVAT Cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... off against the excise duty payable on the manufactured items i.e. branded yearn. The assessee was paying higher rate of excise duty on the raw material purchased by it as against the rate of excise duty applicable on the manufactured items, consequently credit of excise duty was available with the assessee. The said excise duty paid from year to year was not claimed as an expenditure but was carried forward from year to year to be adjusted against the excise duty payable by the assessee on its manufactured items. However, during the year under consideration the assessee closed down its manufacturing unit and consequently the benefit of the CENVAT credit remained un- adjusted. Once the manufacturing unit of the assessee is closed down, admi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... excise is levied in the form of basic duty. The assessee has adopted exclusive method of accounting, therefore debited the net purchases and those were separately recorded in the books of accounts. We find force in this argument of the assessee because while maintaining the exclusive method of accounting the assessee had a choice to increase the value of the purchases in respect of the duty paid in the form of AED NCCD. In other words, an expenditure was incurred but that expenditure could not be adjusted against the CENVAT Rules because on the finished goods, i.e. texturised yarn only the basic duty is leviable. We, therefore, hold that the amount which is now written off being part of the business expenditure, hence allowable under the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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