Custom, Excise & Service Tax Tribunal
M/S. Sanghavi Engineering vs Cce, Hyderabad on 13 July, 2012
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT BANGALORE
Bench - SMB
Court I
Date of Hearing:13/07/2012
Date of decision:13/07/2012
Appeal No.E/2428/2010
(Arising out of Order-in-Appeal No.93/2010(H-IV)CE dt. 31/08/2010 passed by CC,CE&ST(Appeals), Hyderabad)
For approval and signature:
Honble Mr. P.G. Chacko, Member(Judicial)
1.
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2.
Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3.
Whether their Lordship wish to see the fair copy of the Order?
4.
Whether Order is to be circulated to the Departmental authorities?
M/s. Sanghavi Engineering
..Appellant(s)
Vs.
CCE, Hyderabad
..Respondent(s)
Appearance Mr. M.V. Sridhar, Consultant for the appellant.
Ms. Sabrina Cano, Superintendent(AR) for the respondent.
Coram:
Honble Mr. P.G. Chacko, Member(Judicial) FINAL ORDER No._______________________ On a perusal of the records and hearing both sides, I find that the lower authorities have asked the appellant to reverse the CENVAT credit availed on certain inputs, the value of which was partly written off their books of accounts during the period from April, 2004 to March, 2009. The learned consultant for the appellant points out that the relevant rule viz. Rule 3(5B) of the CENVAT Credit Rules, 2004, as it stood during the above period, did not require such reversal of CENVAT credit. It is submitted that such reversal of CENVAT credit was warranted only in a case where the entire value of the inputs was fully written off. In this connect, it is further submitted that the requirement of reversal of CENVAT credit on inputs in cases of partial writing off of value was brought into effect only on 01/03/2011 and, therefore, prior to that date, there was no such requirement. The provisions cited by the learned consultant are reproduced below:-
Prior to 01/03/2011 3(5B) If the value of any,
(i) input, or
(ii) capital goods before being put to use, on which CENVAT Credit has been taken is written off fully or where any provision to write off fully has been made in the books of account, then the manufacturer shall pay an amount equivalent to the CENVAT credit taken in respect of the said input or capital goods.
From 01/03/2011 3(5B) If the value of any,
(i) input, or
(ii) 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 off fully or partially has been made in the books of account then the manufacturer or service provider, as the case may be, shall pay an amount equivalent to the CENVAT credit taken in respect of the said input or capital goods.
2. In view of the cited provisions, it has to be held that, prior to 01/03/2011, a manufacturer of final product who availed CENVAT credit on inputs was not required to reverse any part of that credit on the ground of a part of the value of the inputs being written off the books of accounts. Only cases of writing off the full value of the inputs on which CENVAT credit had been availed called for reversal of the credit. The present one is not such a case. It is also pertinent to note that the Department has no case that the amendment dt. 01/03/2011 has retrospective effect.
3. In the result, the impugned order is set aside and this appeal is allowed. ( Pronounced and dictated in open court ) ( P.G. CHACKO ) MEMBER (JUDICIAL) Nr 4