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TMI Blog2021 (3) TMI 746X X X X Extracts X X X X X X X X Extracts X X X X ..... certain factual aspects stating that in the said case, the unit had been closed down. However, the said contention sought to be given by the Revenue is not tenable, because the assessee could not have availed the set off on account of operation of law and from the assessment year 2007-08 onwards, Central Excise duty on edible oils were deleted. In the case of M/s. NCS Distilleries P. Ltd., it appears that the union was merged with other company and therefore, the credit remained unutilized. However, this is not a feature to distinguish the said decision. In fact, the Tribunal has taken into consideration as to how the CENVAT Scheme operates and granted relief to the assessee. The Tribunal has once again re-appreciated the factual position a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d counsel for the respondent. 4. The respondent is a manufacturer of edible oil and filed its return of income for the assessment year under consideration i.e. AY 2007- 08 declaring a total income of ₹ 17,56,15,534/-. During the course of scrutiny assessment proceedings under Section 143(3) read with Section 263 of the Act, the Assessing Officer observed that a sum of ₹ 1,83,04,644/- represents a part of balance in the account of Service Tax set off account as on 31.03.2007 and the same was charged to Profit Loss account on the presumption that this amount will not be useful for future set off against Central Excise duty payable and Service Tax payable as the Excise on edible oil was discontinued with effect from 01.03.2005. 5. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate Bench at Chandigarh in the case of M/s.Mohan Spinning Mills (supra) has opined as under:- 7. We have heard the rival contentions and perused the record. The issue arising in the present appeal is in respect of the deduction claimed on account of CENVAT amounting to ₹ 35,94,577. The assessee was engaged in the business of manufacturing and trading of yarn and fibre. The yarn manufactured by the assessee was an excisable item. The assessee was paying excise duty on the raw material purchased i.e. acrylic yarn/fibre and polyester yarn/fibre. In turn, assessee was liable to pay duty on its manufactured items. The rate of excise duty payable on the raw material was higher and the assessee was depositing the excise duty in PLA account w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble on manufactured items, cannot be utilized by the assessee and the said 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 thus allowable as business expenditure under the provisions of section 37(1) of the Act relatable to the year, in which the manufacturing activities are closed down by the assessee. Accordingly, we direct the Assessing Officer to allow the claim of the assessee in respect of write off of CENVAT credit of ₹ 35,94,577/-. Ground No.1 raised by the assessee is thus allowed. 7. The CIT(A) also took note of the decision in the case of Girdhar Fibres P. Ltd. Vs. ACIT in ITA. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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