Written-off spares still usable: Appeal dismissed in duty demand case. Commissioner (Appeals) rules in favor of respondent.

The appeal against the Order-in-Appeal concerning duty demand on written-off spares was rejected. The Commissioner (Appeals) accepted the respondent's argument that although the spares were written off in the books of accounts, they were still physically available and capable of use. The judgment emphasized that the spares' writing off for accounting purposes did not mean they were unavailable for future use. The decision favored the respondent, citing relevant legal precedents and highlighting that the spares' availability outweighed the revenue's arguments. The appeal by the Revenue was dismissed, upholding the impugned order and relevant legal principles.

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Issues:
- Appeal against Order-in-Appeal regarding duty demand on written-off spares.
- Whether written-off spares can be considered for duty credit.
- Interpretation of the value of spares written off in books of accounts.
- Application of relevant judgments and Board Circular in the case.

Analysis:
1. The appeal was filed against the Order-in-Appeal concerning the demand of duty on spares written off by the respondent. Despite no representation from the respondent, the appeal was considered for disposal due to the narrow compass of the issue involved.

2. The core issue revolved around the duty demand on spares written off by the respondent as obsolete. The respondent argued that although the spares were written off in the books of accounts, they were physically available and some were subsequently used. The Commissioner (Appeals) accepted this contention, emphasizing that the spares were still capable of use and physically present in the factory premises.

3. The Commissioner's findings highlighted that the writing off of spares in the inventory was for accounting purposes only, and there was no evidence to suggest that the spares were not available or would not be used in the future. The absence of contrary evidence led to the decision in favor of the respondent, citing precedents like the case of Bharat Heavy Electricals Ltd. v. CCE, Bangalore, and other relevant judgments.

4. The judgment emphasized that the Board Circular, while binding on the revenue, was outweighed by judicial pronouncements favoring the respondent on identical issues. Consequently, the appeal filed by the Revenue was rejected, affirming the correctness of the impugned order and the application of relevant legal precedents in determining the duty demand on written-off spares.

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