Admissibility of MODVAT/CENVAT credit on the input/capital goods which are written off being obsolete or unfit for use.

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..... Board's Circular No.101/12/95-CX. 8 dated 22.02.95 which stipulates reversal of modvat (cenvat) credit taken on the inputs which are subsequently written off being obsolete or unfit for use. 2. The Audit Report for 1998-99 has pointed out a case involving Hyderabad III Commissionerate where credit taken on inputs was not reversed although the inputs were written off by the assessee as being obso .....

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..... capable of and available for use in the manufacture of finished goods, there would be no question of payment of CENVAT credit availed. (iii) In respect of capital goods viz. components, spare parts etc. which are written off before use and hence are not proposed to be used, the CENVAT credit availed will have to be paid back on the same lines as applicable to "inputs" as mentioned in (i) above. .....

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