SANGHAVI ENGINEERING Vs. COMMISSIONER OF C. EX., HYDERABAD

JUDGEMENT

(1.) 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 account 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 connection, 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 1 -3 -2011 and, therefore, prior to that date, there was no such requirement. The provisions cited by the learned consultant are reproduced below : - Prior to 1 -3 -2011

(2.) IN view of the cited provisions, it has to be held that, prior to 1 -3 -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 account. 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 dated 1 -3 -2011 has retrospective effect.

(3.) IN the result, the impugned order is set aside and this appeal is allowed.