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TMI Blog2013 (11) TMI 113X X X X Extracts X X X X X X X X Extracts X X X X ..... items, cannot be utilized by the assessee and the write off of CENVAT credit, is allowable as an expenditure in the year under consideration on the closure of the business - The write off of CENVAT credit by the assessee in its books of account is allowable as business expenditure under the provisions of section 37(1) of the Act relatable to the year - The assesse is allowed to claim write off of Cenvat Credit – Decided in favour of assesse. - IT Appeal No. 1212 (Chd.) of 2011 - - - Dated:- 25-4-2012 - Ms. SUSHMA CHOWLA AND MEHAR SINGH, JJ. Ashwani Kumar for the Appellant. Akhilesh Gupta for the Respondent. ORDER Ms. Sushma Chowla, Judicial Member - The present appeal filed by the assessee is against the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e was that it had not carried on any production after December, 2005/January, 2006 and the entire machinery was sold by the assessee. Thus, the said CENVAT credit became irrecoverable and the same was written off during the year under consideration. The Assessing Officer observed that sections 28 to 44 of the Act dealt with the profits and gains of business and profession and deductions allowable under sections 31 to 37 of the Act are enumerated by the Assessing Officer in the table at pages 3 and 4 of the assessment order. The Assessing Officer was of the view that the claim of CENVAT irrecoverable does not fall as an expense under any of the above said sections. The Assessing Officer referred to sub-section of sections 36 and 37 at length ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder consideration or was relevant to the year under consideration and hence not allowable under section 37 of the Act. The addition made by the Assessing Officer was thus confirmed by the CIT (Appeals). Another addition made on account of disallowance of interest relatable to interest free advances was also upheld by the CIT (Appeals). 5. The assessee is in appeal against the order of the CIT (Appeals). The learned A.R. for the assessee at the outset pointed out that ground No.2 is not pressed. In respect of ground No.1 the contention of the learned A.R. for the assessee was that the assessee firm was suffering losses and it had closed down its business during the year under consideration. The CENVAT credit remaining in the account of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uty payable on the finished products was on the lower side and consequently over the period of years the assessee had credit of excise duty resulting in accumulation of CENVAT. 8. During the year under consideration in the month of December, 2005/January, 2006, the assessee closed its manufacturing unit and surrendered its excise registration number. The credit available in the CENVAT account which was adjustable only against the excise duty payable on the products manufactured by the assessee remained un-adjusted in the absence of any excisable finished goods. The said credit available in the CENVAT account was only adjustable against the liability of the assessee vis- -vis to the excise department and in case of its non-adjustment the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st the rate of excise duty applicable on the manufactured items, consequently credit of excise duty was available with the assessee. The said excise duty paid from year to year was not claimed as an expenditure but was carried forward from year to year to be adjusted against the excise duty payable by the assessee on its manufactured items. However, during the year under consideration the assessee closed down its manufacturing unit and consequently the benefit of the CENVAT credit remained un-adjusted. Once the manufacturing unit of the assessee is closed down, admittedly the benefit of CENVAT credit not availed of against the excise duty payable on manufactured items, cannot be utilized by the assessee and the said write off of CENVAT cred ..... X X X X Extracts X X X X X X X X Extracts X X X X
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