CESTAT sets aside adjudication order recovering CENVAT credit for operational quantity of inputs written off in the books of account, absent consideration of quantity written back. Perusing Rule 3(5B) of CENVAT Credit Rules, 2004, CESTAT observes that credit is required to be reversed in principle on the quantity of inputs written off, however, “payment of cenvat credit should be on the net quantity to written off after adjusting the written back quantity”.
Noting that in present case, assessee was not only writing off inputs but as and when the written off quantity was found useable, the same was written back in the books of account, CESTAT remarks, “both lower authorities are absolutely wrong for not considering the written back quantity”. However, upholds reversal on opening balance shown in the obsolescence account subject to verification of the fact that said quantity pertained to period post introduction of Rule 3(5B), accordingly, remands matter for re-quantification of actual credit.