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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 ..... off fully or partially, or wherein any specific provision to write-off fully or partially has been made in the books of accounts.' On going through the decision in the appellant's own case, it is found 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. Therefore, relying on the appellant's own case, it is held that the provision of Rule 3(5B) of Cenvat Credit Rules, 2004 are not applicable to the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge of inventories. There is no dispute that the goods were still available in the inventory of the appellant for being used in the manufacturing activity, and the same were being so used over the period of time. This accounting entry had been made as per the internal Accounting Policy Manual. These values are being reviewed on yearly basis in accordance with utilization of inventories. Fresh provisions are created every year for inputs which become slow moving/non-moving during the year and provisions made earlier are written back in cases, where such slow-moving inputs are utilized in manufacturing. The following table summarizes the provisions created and written back during the relevant period : Assessment Year Existing provision (as p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the show cause notice, vide letter dated 21.08.2014 contending that the credit is not reversible and consequently no interest is chargeable and no penalty is imposable. Further, it was also contended that in the absence of any fraud, suppression etc on the part of the appellant, extended period of limitation could not be invoked. (v) Thereafter, again on 04.11.2015 another show cause notice was issued to the appellant proposing to demand reversal of Cenvat credit of Rs. 2,90,41,880/- along with interest and penalty for the subsequent period viz. April 2013 to March 2015 on the same ground, again by invoking the extended period of limitation. The appellant filed a detailed reply dated 03.02.2016 rebutting every allegation contained i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of Cenvat Credit on inputs, capital goods and input services as provided under Cenvat Credit Rules, 2004 (hereinafter referred as CCR 2004). While auditing the 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-movin/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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed are written off fully or partially or any provision has been made to write off those fully or partially than the manufacturer or service provider are required to reverse/pay Cenvat credit availed on such inputs or capital goods. Thus it is clear that provisions of rule 3(5B) CCR are applicable only when the value of asset and or inventory is written of fully or partially, or wherein any specific provision to write-off fully or partially has been made in the books of accounts. 9. 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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tate 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. Ther ..... X X X X Extracts X X X X X X X X Extracts X X X X
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