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TMI Blog2024 (12) TMI 1538X X X X Extracts X X X X X X X X Extracts X X X X ..... d for the period April 2008 to March 2015. 2. The facts of the case are as under :- (i) The appellant is inter alia engaged in the manufacture of various alloy steel products falling under Chapters 72 and 73 of the Central Excise Tariff Act, 1985. The appellant is availing credit for the duty paid on inputs and capital goods used in or in relation to manufacture of finished goods. (ii) The appellant had made provision in the books of account for partially writing down the value in respect of slow moving/non-moving inventory of stores and spares, in line with the Accounting Standard-2 issued by ICAI, depending on the age of inventories. There is no dispute that the goods were still available in the inventory of the appellant for being u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he period April 2008 to March 2013, proposing to demand the reversal of Cenvat credit amounting to Rs. 1,30,06,511/- along with interest and penalty, on the ground that appellant is required to reverse credit under Rule 3(5B) of the Credit Rules in respect of provision made for partial reduction in the value of non-moving/slow-moving inventory, even though such inventory is usable and physically available in the store. The demand was computed by assuming the provision made for slow moving/non-moving inventory appearing in the books of accounts as the partial write-off value. The appellant submitted a detailed reply to the show cause notice, vide letter dated 21.08.2014 contending that the credit is not reversible and consequently no in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as also taken up by the Hon'ble Gujarat High Court in the case of Commissioner of Central Excise vs. Ingersoll Rand (India) Ltd. [2014 (300) E.L.T. 347 (Guj.)]. 4. On the other hand, the Ld.AR for the department supported the impugned order. 5. Heard the parties, considered the submissions and perused the record. 6. We find that the issue came up before this Tribunal in the appellant's own case reported as 2024 (10) TMI 1336-CESTAT NEW DELHI, wherein the facts of the case are as under:- "The appellant herein is engaged in manufacture of Billets, Slabs, angles, TMT Bar, Channels etc. They were also availing the facility of Cenvat Credit on inputs, capital goods and input services as provided under Cenvat Credit Rules, 2004 (hereinafter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 provider is required to pay an amount equivalent to the CENVAT credit taken in respect of the said input or capital goods." 8. On a plain reading of the said Rule it is clear that in the event the value of any input or capital goods before being put to use on which Cenvat credit has been availed are written off fully or partially or any provision has been made to write off those fully or partially than the manu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that they have not written off the inventory from the asset account in actuality the provision has bene made by appropriation in the profit and loss account without writing off any input/value from the asset/inventory account. I observe that there is a difference between writing off inputs vis-à-vis provision of slow moving inventory the goods continued to lie in the appellant's factory and gradually used in manufacture of dutiable final products such goods cannot be called as the inventory written off. I draw my support from the decision of Hon'ble Supreme Court in the case of Reliance Energy Ltd. vs. Maharathtra State Road Development Corporation reported as 2007 (8) SCC 1 wherein it has been observed that the concept of provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inventories have become obsolete, I hold that the demand confirmed invoking Rule 3(5B) in the circumstances is not sustainable. There is also no denial to the fact that in case where such non/slow moving inventory had become obsolete the appellant had already reversed the credit." 7. On going through the decision in the appellant's own case, we find that the facts are not in dispute that the appellant has made provisions in books of accounts for partial writing down the value in respect of the slow moving and non-moving of inventories and spares whereas the provision of Rule 3(5B) of Cenvat Credit Rules are applicable when the provision in the books of accounts, the stock/inventories have been written off which is not the case in hand. T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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