TaxTMI 
TaxTMI 
2026 (3) TMI 840
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....is whether cenvat credit availed by the appellants is required to be reversed in terms of Rule 3(5B) of the CENVAT Credit Rules, 2004 on account of 'writing down' the value of the inputs in accordance with the accounting principles. 3. Briefly stated the facts of the case are that the appellant M/s. Kluber Lubrication India Pvt. Ltd. are manufacturers of lubricants and other chemical preparations classifiable under Chapter Heading 27, 28, 34, 38 and 39 of the Central Excise Tariff Act, 1985. The appellants procured raw materials such as lubricants and other chemicals which are essential for the manufacture of lubrication oils and hold inventory of the same in anticipation of orders from their customers. These raw materials are procured locally as well as through imports. The duty paid on the inputs (raw materials / consumables etc.) procured is availed as cenvat credit. The appellant as per Accounting Standards 1 and 2 as per their internal policy 'write down' the value of the inputs which are slow moving / obsolete. As per the principles of internal accounting policy of the appellant's company the 'writing down' of the value is required to be made ....
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....partially allowed, wherein it was held that the appellants are required to reverse proportionate cenvat credit in terms of Rule 3(5B) the Cenvat Credit Rules, 2004 on account of partially 'writing down' the value of the inputs in their books of account and the matter was remanded to the Lower Authority for addressing the dispute regarding the quantification of the demand. 5. Based on the above remand direction, Denovo proceedings were initiated despite the request of the appellant to keep the Denovo proceedings in abeyance /call book. On Denovo Adjudication, the appeal was rejected on the finding that the appeal cannot be kept in abeyance / call book. From the above, it can be noted that the issue in the Appeal No. E/21272/2017 and E/20405/2023 is on merits i.e. reversal of proportionate credit availed in respect of 'writing down' the value of the inputs under Rule 3 (5B) of the CENVAT Credit Rules, 2004. Appeal No. E/20772/2024 was filed to protect the interests of the appellants and to ensure that no recovery of demand is initiated by the Revenue as confirmed vide the Denovo Order-in-Original dated 02.11.2023. 6. The appellant during the hearing,....
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....a of decisions /judgements passed by the Courts /Tribunal holding that merely 'writing down' the value of inputs from books of account as per accounting standards for taking benefit of depreciation under Income-tax Act, 1961 would not imply that inputs have been 'written off fully or partially' and hence credit is not required to be reversed in terms of Rule 3(5B) of Cenvat Credit Rules, 2004. In this regard, reliance is placed on the decision in the matter of M/s. Solvay Specialties India Pvt. Ltd. Vs. Commissioner of Central Excise, Surat-II, 2018 (12) G.S.T.L. 82 (Tri. - Ahmd.) wherein it is held that:- "7. On a plain reading of the said Rule it is clear that in the event the value of any input or capital goods before being put to use on which Cenvat credit has been availed are written off fully or partially or any provision has been made to write off fully or partially than the manufacturer or service provider are required to reverse /pay Cenvat credit availed on such inputs or capital goods. In the present case from the very beginning the appellant have submitted that they have only written down the value of the raw materials in their books of ac....
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....Zinc Ltd. Vs. C. CGST, Udaipur, 2021 (10) TMI 482 - CESTAT NEW DELHI 10. Learned Counsel further submitted that prior to 01.03.2013, there was no recovery mechanism to recover any Cenvat Credit under Rule 3(5B) of the Cenvat credit Rules, 2004 which was introduced only on 01.03.2013 vide Notification No. 3/2013-CE (NT) dated 01.03.2013. In this regard, learned counsel relied on the following decisions:- (i) Hewlett Packard India Sales Pvt. Ltd. Vs. CST, LTU, Bengaluru, 2024 (8) TMI 718-CESTAT BANGALORE (ii) M/s. Stumpp, Schuele and Somappa Springs Pvt. Ltd. Vs. Commissioner of Central Excise and Service Tax, LTU, Bangalore, 2025 (5) TMI 571 - CESTAT BANGALORE (iii) M/s. GKN Driveline (India) Ltd. Vs. CCE, Delhi-III, 2023 (9) TMI 1131 -CESTAT CHANDIGARH (iv) Haver Ibau India Pvt. Ltd. Vs. C.C.E. & S.T. VADODARA-II, 2023 (10) TMI 677-CESTAT AHMEDABAD (v) M/s. Ericsson India Pvt. Ltd. Vs. CCE, Jaipur, 2019 (3) TMI 776 - CESTAT NEW DELHI 11. Hence the demand for the period from April 2010 to February 2013 is not sustainable on account of absence of recovery mechanism during the relevant period. 12. The Learned Coun....
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....6 (S.C.)] and Pushpam Pharmaceuticals Company Vs. Collector of Central Excise, Bombay-[1995 (78) E.L.T. 401 (S.C.)]. 14. Learned Authorized Representative (AR) reiterated the findings in the impugned orders. 15. Heard both sides and perused the records. 16. We find that these 3(three) appeals are filed with respect to demand of cenvat credit /reversal of cenvat credit for the goods which have been 'written down' in the books of account as per the accounting principles of the Institute of Chartered Accountant of India (ICAI). Appeal No. E/20015/2024 is with respect to keeping the Denovo Adjudication in abeyance which the Department has not acceded and proceeded with the Denovo Adjudication. We find the appellants have raised the issue that the demand is not sustainable on the grounds that there was no recovery mechanism of the cenvat credit payable under Rule 3(5B) of Cenvat Credit Rules, 2004 till 01.03.2013. Further we find that the reversal of cenvat credit for 'partially write off' is only introduced on 01.03.2011. In this case, we find that the appellant has only 'written down' the value of the slow moving inputs /consumables f....