TMI Blog2022 (11) TMI 1001X X X X Extracts X X X X X X X X Extracts X X X X ..... ithout writing of any amount/value from the asset/inventory account - Rule 3(5B) of CCR is attracted only when the value of the asset and/or inventory is written off fully or partially or wherein any specific provision to write off a fully or partially has been made in the books of account - In the facts of the present case, the appellant have made a general provision, which is not attributable to any particular asset/inventory. Admittedly, revenue have not been able to identify the details of inventory or asset, for which the general provision has been made. It is further evident that the appellant have demonstrated that such provision has been made year to year by way of increasing or reducing the provision, depending on the usage of i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rried out, the provision on spares lying as per the provision made in last year (opening balance) is adjusted from the provision to be made in the current year and accordingly, the provision is made for the balance amount. 4. Pursuant to audit for the period 2014-15 up to june 2017, it appeared to revenue that the appellant have created a provision for non/slow moving inventory amounting to Rs. 2,94,05,889/-. However, they have not reversed an amount calculated at Rs. 36,67,466/- towards Cenvat credit availed in respect of the value of such provision, in terms of Rule 3(5)(B) of the CCR. The appellant by their letter dated 23/10/2018 express their disagreement with audit objection stating that mere creation of provision for slow moving/n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dard adopted, clarifying that the inventory is being carried at the original cost and only provision have been created as required under the accounting standard, it was also urged that there is neither loss of such goods nor reduction in original cost and such goods are available in the factory in usable condition. As per Accounting Standard AS-2, inventories are required to be valued at lower of cost or net realisable value. It was further urged that appellant has been creating such provision in the books right from the financial year 2005-06, and never any objection raised, required reversal of Cenvat credit. Further writing down or writing off are very different under the accounting principles. It was further urged that the provision of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant urges that the issue is no longer res integra and under similar facts and circumstance, this Tribunal have decided the issue in favour of the assessee in the following rulings: Hindustan Zinc Ltd. v. Commissioner, CGST, Udaipur, 2021 (8) TMI 935 - CESTAT NEW DELHI Hindustan Zinc Ltd. v. Commissioner, CGST, Udaipur, 2021 (10) TMI 482 - CESTAT NEW DELHI Takata India Pvt. Limited v. CCE, Alwar,2022 (4) TMI 1359 - CESTAT NEW DELHI 8. In the afore-cited cases, this Tribunal had categorically held that the provisions of Rule 3(5B) of the Credit Rules are applicable only when the value of the asset and or inventory is written off fully or partially, or wherein any specific provision to write off fully or partially has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only created a general provision for slow/non-moving inventory and have admittedly not written of the inventory from the inventory or the asset account. In actuality, such provision have been made by appropriation in the profit and loss account, without writing of any amount/value from the asset/inventory account. Rule 3(5B) of CCR is attracted only when the value of the asset and/or inventory is written off fully or partially or wherein any specific provision to write off a fully or partially has been made in the books of account. In the facts of the present case, the appellant have made a general provision, which is not attributable to any particular asset/inventory. Admittedly, revenue have not been able to identify the details of invent ..... X X X X Extracts X X X X X X X X Extracts X X X X
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