9911796707
TMI Blog2023 (12) TMI 243X X X X Extracts X X X X X X X X Extracts X X X X ..... considered in the course of hearing. The facts of the case in brief are that the Respondent is a manufacturer of tyres, tubes and flaps. The officers of erstwhile Central Excise, during the course of audit of the records of the Respondent, alleged that the Respondent had made provisions for write off of cenvatable goods in their Balance sheets for the financial year 2011-12, 2012-13, 2013-14 & 2014-15. The Superintendent Central Excise, Meerut issued letter dated 27.01.2016 to the Respondent to provide details to determine the amount of Cenvat to be reversed in terms of Rule 3(5B) of Cenvat Credit Rules, 2004. The Respondent vide letter dated 29.02.2016 submitted that the word write off is no where mentioned in the Balance sheet and only p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sclosed that the inventories are net of provision. The inventories are not written off. In the subsequent period, such stores and spares are in fact used and then the provision in respect of the same is reversed. The respondent submits that the inventories are written off only in cases where the same are discarded and are not available physically in their factory. The Adjudicating Authority vide Order-in-Original No.69/ADC/Meerut2017 dated 31.03.2017 rejected the submission of the Respondent and invoked the extended period of limitation. The Adjudicating Authority observed that the provisions of slow moving/obsolete stores and spares made in their books of accounts for Financial Year 2011-12, 2012-13, 2013-14 & 2014-15 was akin to the provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 5. The learned Advocate appearing on behalf of the Respondent submits that the inventories are written off only in cases where the same are discarded and are not available physically in their factory. 6. Heard both sides and perused the appeal records. 7. We find that the revenue in the show cause notice as well as order-in-original itself admits that provisions for slow moving store & spare in balance sheet for Financial Year 2011-12, 2012-13, 2013- 14 & 2014-15 is not a case of "write off" but akin to write off. Thus, the proceedings are based on a presumption and hence not sustainable in law. Hon'ble Supreme Court in Union Of India VS IND-Swift Laboratories Ltd. (2011) 4 SCC 635 paragraph 20 has held that a taxing statute must b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urer or service provider is required to pay an amount equivalent to the CENVAT credit taken in respect of the said input or capital goods." 9. Having considered the rival contention, we find that the condition precedent under Rule 3(5B) of CCR, 2004 is, if the value of any inputs/goods have been written off fully or partially or where any provision to write off fully has been made in the books of account, in respect of value of any inputs, then the manufacturer or service provider, as the case may be, shall pay an amount equivalent to the Cenvat credit taken in respect of the said inputs. We hold that in the facts and circumstances of this case, there being no writing off or removal of inputs under the provisions of Rule 3(5B) of CCR, 2004 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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