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TMI Blog2019 (3) TMI 857X X X X Extracts X X X X X X X X Extracts X X X X ..... or additional duty as may be specified in such notification paid on the goods used in the manufacture of the said final products. Rule 57F provided for the manner of utilisation of inputs and the credit allowed in respect of duty paid thereon. It can be seen that the liability of the assessee to pay duty equal to the amount of credit availed in respect of a particular input would arise at the time of the removal of the inputs for home consumption. This rule did not envisage reversal of Cenvat credit even before removal of goods. There was no provision under which the cenvat credit already taken under the Rules of 1944 could be directed to be reversed simply because the input goods were not utilised for a certain period of time. We also n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods on the obsolete inventory written-off for the period financial year 2010 to financial year 2014 was irregular, unlawful and ineligible. Resultantly, vide show cause notice No.228 dated 19.10.2015 that the reversal of the aforesaid irregularly availed cenvat credit was proposed alongwith the interest and the penalties. The said proposal was initially confirmed vide Order-in-Original No. 75 dated 17.11.2016. Appeal thereof was preferred which has also been rejected. Resultantly, the appellant is before this Tribunal. 2. It is submitted on behalf of the appellant that the audit officers did not verify RG 23 A and RG 23 records relating to inputs and capital goods in regard to the credit taken and to verify whether there was any write ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned counsel for the parties and having perused the documents on record, the short question that calls for our consideration is: Whether upon an assessee writing off certain inputs either partially or fully in its books of account for the income-tax purpose, he is also required to reverse Cenvat credit taken on such inputs? 6. As already noted, the case of the assessee is that such writing is only for the limited purpose of its accounts so as not to present a distorted picture of the balance sheet and the ultimate profit. Such writing off for the income-tax purpose had no relation to the manufacturing activity of the assessee. 7. The Rules of 1944 did not envisage any period within which the input must be consumed. In the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... final products. Rule 57F provided for the manner of utilisation of inputs and the credit allowed in respect of duty paid thereon. It can be seen that the liability of the assessee to pay duty equal to the amount of credit availed in respect of a particular input would arise at the time of the removal of the inputs for home consumption. This rule did not envisage reversal of Cenvat credit even before removal of goods. 9. With this background, we may peruse the two circulars heavily relied upon by the revenue. These circulars have been issued by the C.B.E. C. in exercise of powers under Section 37B of the Central Excise Act, 1944 ( the Act , for short). In the circular dated 22-2-1995, it was inter alia provided as under :- Instance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the income-tax purpose and the approach for stock maintenance for the purpose of manufacturing activities relevant for the question of excise. Therefore, merely because the value of goods diminished in the books of account of the assessee would not by itself permit the Department to insist on reversal of the credit particularly when such goods were still available in the factory in usable condition. 12. In absence of any such authority under the rules, the C.B.E. C. could not have issued circular for reversal of the credit. The reversal of the credit would amount to collection of duty which would be wholly unauthorised. The Board s circular could not have created a liability which did not exist under the rules. 13. In view of a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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