No Reversal of CENVAT Credit of Excise Duty when Imported Goods used in Manufacture of Final Products u/r 3(5B) of CCR Prior to 01.03.2013: CESTAT [Read Order]

The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the imported goods are used in the manufacture of the final product, the CENVAT credit cannot be denied or reversed under rule 3(5B) of the CENVAT Credit Rules (CCR),2004 before the period of 01.03.2013.

Haver Ibau India Pvt Ltd, the appellant assessee had purchased certain goods from its principal Haver Boecker amounting to Rs. 59,489,772/- and the amount was written off by the principal who imported these goods from their principal and they had used the same for the manufacture of finished products. 

The assessee appealed against the order passed by the adjudicating authority against the demand for reversal of CENVAT credit on certain amounts written off by the vendor. 

Bharat Rai Chandani and Ansul Jain, the counsels for the assessee contended that the CENVAT credit was taken had been used in the manufacture of final products and therefore, their goods do not get hit by the mischief of Rule 3(5B) of CENVAT Credit Rules. 

Also submitted that the rule requires that the input or the capital goods should be written off partially or fully and provision for writing off fully or partially should be made in books of accounts. 

P. Ganesan, the counsel for the department relied on the decisions made by the lower authorities and contended that the assessee was not liable for avail of CENVAT credit and that the reversal raised by the revenue was as per the law and liable to be sustained. 

The Bench observed that as per rule 3(5B) of CCR, once the goods are used for the manufacture of final products or the provision of taxable services, the CENVAT credit can be allowed. 

The two-member bench comprising Ramesh Nair (Judicial) and Raju (Technical) held that the recovery provisions for the amount recoverable under Rule 3(5B) of CCR was introduced only with effect from 01.03.2013 and the present case was not involved in the date and quashed the demand for reversal of CENVAT credit while allowing the appeal filed by the assessee. 

To Read the full text of the Order CLICK HERE

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