TaxTMI 
TaxTMI 
2026 (1) TMI 1343
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.... the Cenvat Credit facility under the Cenvat Credit Rules, 2004. During the course of verification of the Balance Sheet of the Appellant by the Internal Audit, it was observed that, during the year 2011-12, the Appellant had made a provision of Rs. 33,58,23,000/- towards reduction in the inventory in the consolidated Balance Sheet of the unit. On enquiry by the audit, it was stated that the raw material stock was written off as on 31.03.2012. The Appellant submitted the Profit and Loss account for the period 2011-12 and informed that, out of the above mentioned amount Rs.16.82 Crores pertains to their unit at Doddaballapur plant, Bengaluru. The credit involved at the rate of 10% duty on the goods written off worked out to Rs. 1,68,20,000/- (Cenvat) Rs.3,36,400/- (Ed Cess) and Rs. 1,68,200/-(SHE Cess) totalling to Rs.1,73,24,600/-. Thereafter alleging that Appellant availed ineligible CENVAT credit, show cause notice dated 03.03.2016 was issued and Adjudication authority as per the impugned order disallowed the CENVAT credit, confirmed demand / recovery along with interest and imposed penalty of Rs. 86,62,300/-. Aggrieved by said order, present appeal was filed. 4. When the appea....
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.... For the year ended 31st March 2011 (Rs.) Opening stocks Work-in-progress 43,50,56,220 41,88,20,950 Finished goods 39,51,925 37,73,810 Less: Excise duty on Opening Stock of FG - (3,52,404) Total Opening Stock (A) 43,90,08,145 42,22,42,356 Closing stocks Work in progress 8,10,74,557 43,50,56,220 Finished goods 27,32,406 39,51,925 Less: Excise duty on Closing Stock of FG (3,69,037) Total Closing Stock (B) 8,38,06,963 43,86,39,108 35,52,01,182 (1,63,96,752) Less: Provision for Inventory 33,58,23,000 0.00 (Decrease)/Increase in work in progress & finished goods 1,93,78,182 (1,63,96,752) 5. The Learned counsel further submits that during inquiry, Appellant had submitted sufficient documentary evidence justifying non availability of physical inventory to write-off or the write-off being only of escalated value of work-in-progress. And it was necessary due to the change in management and the product dealt by the Appellant and is revenue neutral. Further submits that there is no willful suppression of fact as evident ....
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....nder the Proviso to Section 11A in the Show Cause Notice should be resorted to only in the event of fraud, collusion, willful misstatement, suppression of fact or contravention of any of provisions of the Excise Act / Rules with intent to evade payment of duty and not as a matter of routine. The Learned counsel also relied on the Circular No. 5/92 dated 13.10.1992 and decisions of this Tribunal in the matter of M/s. Oswal HI-Tech Pvt. Ltd. [2008 (232) ELT 34 (Tri. - Bang.)] and M/s. NSP Electronics Ltd. Vs. Commissioner of C. Ex., Bangalore [2010 (262) ELT 604 (Tri. - Bang.)]. 8. The Learned Authorized Representative (AR) for the Revenue reiterated the finding in the impugned order and also submits that the Adjudication authority rightly confirmed the demand. Further submits that the Appellant has made provision for writing-off of raw materials totally valued at Rs.16.82 crores and has not reversed the credit involved on these materials to the extent of Rs. 1,73,24,600/- pertaining to the unit at Doddaballapur plant, as required under Rule 3(5B) of Cenvat Credit Rules, 2004. Further submits that the Appellant has not furnished any statutory records / accounts to show that the wr....
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.... made. "5. I have gone through the records of the case carefully. In the present case, the show cause notice itself has been issued on the presumption that as on 31-3-2004, the value of the in-process goods to the tune of Rs. 12,74,726/-. In the course of personal hearing, the documents were shown to me and I found that as on 31-3-2004, the value of in-process stock is 'nil'. In any case, when the appellants opt out of the Cenvat Scheme to avail full benefit of the SSI exemption, they would not be in a position to utilize any Modvat Credit. After reversal of credit as required under Rule 9(2) of Cenvat Credit Rules, 2002, the balance would also lapse. In such circumstances, there is no question of demand of duty equal to the credit contained in in-process material. In any case, when the value of in-process material is 'nil' as on 31-3-2004, the issue raised itself never arises. In these circumstances, the duty of Rs. 2,03,956/- and levy of penalty are not warranted. The appeal and the stay application are allowed with consequential relief." 11. In view of the above following the ratio of the above decision, we set aside the demand of duties. Once the d....