Cenvat Credit Balance Mismatch Between ER-1 & Balance Sheets, Central Excise

[Chetan Pawar]

Dear Experts,

As per our Company Policy, we have taken 100 % Credit of all Input in excise Cenvat Credit Register & but in accounts(Balance sheet) we have taken only 50 % and remaining we have expense out as material cost. Hence our Cenvat Credit Balance are always mismatch between ER-1, ST-3 & Balance Sheet. illustration . we purchase the input Amount of ₹ 100 + Excise Duty 12.50 %+vat 5% = ₹ 118.12 but in Excise Records we have talken fully credit i.e. ₹ 12.50 but in accounts we have taken cenvat only ₹ 6.25, remaining are in added in Ass.Value means purchase cost while booking.

The same has been Approved by our Auditors CA firm & reflect in his 3CA report with Notes..

Can anyone tell me what is the legal bonding for that and is it right to do the same way

or is their any possibilities to object by Service tax and central excise Department while auditing

Thanks & Regards,

Chetan Pawar

Posts / Replies

[YAGAY AND SUN]

It seems that statutory returns are being filed without conducting reconciliation with the financial. Department can issue SCN for the same.