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TMI Blog2024 (10) TMI 1336X X X X Extracts X X X X X X X X Extracts X X X X ..... s of accounts. In the present case from the very beginning the appellant have submitted that they have only written down the value of the raw materials in their books of account and has not written off the value fully or partially. Also, the claim of the appellant are that all these raw materials are still available in their factory and are in usable conditions; the value is written down as per the accounting principle and since the credit availed is on inputs, therefore, under the CCR, 2004, there is no bar in taking depreciation benefit' under Income-tax Act, 1961 - there is no evidence to the effect that the inputs whose value had been written down had been removed from the factory, thus, reducing the value of the raw materials. Keeping in view the accounting principles and Income-tax benefit, if any, it cannot be construed that the value of the inputs are written off from the books of account and are not usable resulting into invoking of Rule 3(5B) of Cenvat Credit Rules, 2004. There is no denial by the Department about appellant to have kept the inventory in their accounts at full value and upon consumption in regular course of business, the cost of inventory is booked at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... records of the appellant, it was pointed out by the auditors that the appellant has made the provision of Rs.20,07,37,034/- against the stock value of Rs.28,14,81,491/- in the Financial Year 2016 17, for non-moving/ obsolete /surplus inventories on which the Cenvat Credit was not reversed by the appellant as is required under rule 3 (5B) of CCR 2004. Though the appellant contended that the said rule does not apply but no documentary evidence could be produced by the appellant. Resultantly, vide SCN No. 16827 dated 16.12.2020 Cenvat Credit amounting to Rs.3,30,81,463/- was proposed to be reversed alongwith the interest and the penalty of the same amount. While adjudicating the said proposal, the original adjudicating authority vide Order No.29/2022 dated 21.12.2022 has ordered the partial recovery for the sum of Rs.7,86,240/- by dropping the balance demand of Rs.3,22,95,223/- alongwith the interest. Penalty of same amount of Rs.7,86,240/- has been imposed upon the appellant. Still being aggrieved the appellant is before this Tribunal. 2. I have heard Mr. Dhruv Tiwari, ld. Counsel for the appellant and Mr. Kuldeep Rawat, Authorised Representative for the Department. 3. Ld. Counsel fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Department about the provisions of writing off their inventory, the appellants have rightly been held responsible for suppressing the relevant facts. The extended period has rightly been invoked. 6. Ld. D.R. has relied upon the decision of this Tribunal Chennai Bench in the case of M/s. Flowserve India Pvt. Ltd. vs. Commissioner of GST and CE reported in 2018 (12) TMI 723 CESTAT-Chennai. With these submissions and impressing upon no infirmity in the order under challenge (OIO dated 21.12.2022) appeal is prayed to be dismissed. 7. Having heard the parties at length and perusing the record I observe that the question to be decided for adjudication of present appeal is: Whether the appellants are required to reverse the credit availed on the inputs alleged to have been written off in their books of account in accordance of rule 3 (5B) of CCR. For this purpose I have perused the rule. It reads as follows:- Rule 3(5B): If the value of any input or capital goods before being put to use on which CENVAT credit has been taken is written off fully or partially or where any provision to write of fully or partially has been made in the books of account, the manufacturer or service provide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inventory written off. I draw my support from the decision of Hon'ble Supreme Court in the case of Reliance Energy Ltd. vs. Maharashtra State Road Development Corporation reported as 2007 (8) SCC 1 wherein it has been observed that the concept of provision for doubtful debts is different from the concept of write off. The provision for doubtful debts cannot be equated to write off . Hon'ble Gujarat High Court also in the case of CCE vs. Ingersoll, Rand India Ltd. reported as 2014 (300) ELT 347 has held that writing down the inputs for Income-tax purposes cannot be equated with writing-off the inputs under Rule 3 (5B) of CCR. 11. I further observe that there is no denial by the Department about appellant to have kept the inventory in their accounts at full value and upon consumption in regular course of business, the cost of inventory is booked at full value itself. There is also no denial to the fact that the non/slow moving inventory has at certain stage being used by the appellant in its manufacturing process. Hence the inventory which had not become obsolete cannot be called as the entry written off. As already observed above Rule 3(5B) CCR is invokable vis- -vis written ..... X X X X Extracts X X X X X X X X Extracts X X X X
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