2016 (6) TMI 469

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.... inputs and components. In the balance sheet of the financial year 2010-11 and 2011-12, the appellant has made certain provision for writing of the finished goods on the basis of the actual price of the case in the market. The appellant has also made certain provisions for inputs and components. On the basis of the audit conducted by the department show cause notices dated 06.09.2012 and 19.07.2013 were issued for the period 2010-11 and 2011-12 respectively to direct the appellant to reverse the cenvat credit on inputs and components used in manufacture of the finished goods for which provision has been made by the appellant for written off in their balance sheet. The show cause notices were adjudicated and denial of cenvat credit was confi....

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....ESTAT, New Delhi to say that CBEC Circular No. 907/27/09-CE dated 7.12.2009 is contrary to the judicial pronouncement and Rule 3(5)(b) of the Cenvat Credit Rules, 2004, therefore, impugned order is to be set aside. 3. On the other hand, ld. DR reiterated the findings in the impugned order. 4. Heard the parties and considered the submissions. 5. After hearing the parties I find that following issues have been raised by the ld. Counsel for the appellant which are incorporated herein below: (i) Whether as per Rule 3(5)(b) of the Cenvat Credit Rules, 2004 the appellant is required to reverse cenvat credit on finished goods which have been written-off or not? (ii) Whether the appellant is required to reverse the cenvat credit on t....

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....ENVAT credit paid earlier subject to the other provisions of these rules]" On going through the said provision, I find that there is no provision for reversal of cenvat credit on inputs/ components which have been used in the manufacture of final product. In fact, as per Section'3 of the Central Excise Act, 1944, the goods manufactured by an assessee are to be cleared on payment of duty, therefore, reversal of cenvat credit on finished goods does not arise; at the most, duty can be demanded. In that circumstances, I hold that the appellant are not required to reverse the cenvat credit on inputs/ components which have been used in the manufacture of finished goods which ultimately written-off by the appellant. Therefore, Issue No. (i)....