2007 (10) TMI 530 - AT - Central Excise

Summary

Issues involved: Interpretation of Modvat credit/Cenvat credit availed by the assessee in relation to inputs subsequently written off in the books of accounts.

Summary:

1. The Revenue appealed regarding the recovery of Modvat credit/Cenvat credit availed by the assessee for inputs written off in the books of accounts. The Commissioner held that as long as the inputs remained in the factory premises and there was no evidence of duty evasion, no recovery or reversal of credit was necessary. The write-off in the books of accounts did not make the assessee liable to reverse the credit, citing various Tribunal decisions in support.

2. The Tribunal referred to a previous case involving M/s Bharat Heavy Electricals Ltd., where it was held that as long as goods were within the factory premises and there was no prescribed time for consumption, disallowing the credit was not justified. The Tribunal allowed the party's appeal based on this reasoning.

3. The Revenue's appeal was brought before the Tribunal, where the learned JDR argued for the Revenue. The Commissioner's order was considered, which also took into account a Board's Circular regarding write-off of inputs. The Tribunal found that the issue was covered by previous Tribunal decisions and upheld the Commissioner's decision, rejecting the Revenue's appeal.

4. The Tribunal concluded that the Commissioner's decision to not require recovery or reversal of credit for written-off inputs was justified based on the Tribunal's previous rulings. The Revenue's appeal was dismissed accordingly.

(Dictated and pronounced in the open Court)