2017 (2) TMI 1043

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....02,267/- on Furnace Oil during 2006-07 to 2007-08 which were used for generation of electricity for further use in the trial-run production of their CRM project. As some quantity of Furnace Oil was capitalized under fixed assets under the head General Expenses in their books of accounts, alleging that the said quantity of Furnace Oil had been used in the fabrication of fixed assets, demand notice was issued for recovery of the credit. In response to the said notice, besides contesting the allegation based on wrong accounting principles, the respondent also referring to the statements of Shri Yatin Ramchandra Patel, an employee of the Respondent categorically submits that for fabrication of the fixed immovable capital structure, they had use....

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.... during investigation as well as before the Adjudicating Authority. Therefore, the Revenues contention that it is raised for the first time before the First Appellant Authority is without any basis. The Ld Advocate supporting the findings of the Ld Commissioner (Appeals) submitted that after taking into consideration the Chartered Accountant's Certificate dtd 21.1.2010 and the accounting principles adopted by the respondent in their balance sheet observed that the Furnace Oil used in the generation of electricity were in turn used in the trial run production of finished goods . 7. I find that from the very inception of the investigation against the respondent, they had vehemently resisted to the audit objection in submitting that Furnac....

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....ng up the fixed structure but used for trial run production of the CRM Project, 70 M.T. Reheating Furnace and EAF Project and as per the Standard Accounting policies they have shown Pro-Operative expenditure capitalized in the heads of Fixed Assets. I find that while raising the said objection the Auditors have not considered the accounting polices adopted by the respondent with regard to "Fixed Assets". "Clause VIII of Significant Accounting Policies stipulates that "Pre-Operative Expenditure & trial run expenditure on the Project is capitalized amongst the various heads of Fixed Assets on the commencement of commercial production of respective project." They said Accounting Policies have been adopted by the respondents according to Accoun....