TaxTMI 
TaxTMI 
2024 (12) TMI 1538
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....long with interest and penalties imposed 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 ....
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....y as being obsolete, the credit taken at the time of procurement thereof is reversed. (iv) A show cause notice dated 31.07.2014 was issued for the 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 appell....
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....Tribunal set aside the demand confirmed against the appellant under Rule 3(5B) of the Cenvat Credit Rules, 2004, therefore, the issue is no more res integra and the same view was 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, Slab....
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....nt appeal is : "Whether the appellants are required to reverse the credit availed on the inputs alleged to have been written off in their books of account in accordance of rule 3 (5B) of CCR." For 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 i....
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....e not usable resulting into invoking of Rule 3(5B) of Cenvat Credit Rules, 2004. 10. I also observe that the appellant has created a general provision for slow/non-moving inventory and have taken the stand 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 f....
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....9 (Tri.-Del.) has been held that since the assessee has made only a general provision and the department has not been able to identify the details of inventory or assets for which the provision has been made as to whether those 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-....