SHORTAGE OF INPUTS
CENVAT / MODVAT CREDIT – SHORTAGE OF INPUTS
The High Court of Judicature at Madras, while deciding R.C.F. No. 11 of 2004 on 28/02/2008, in re : ASCO (INDIA) LTD. Vs CEGAT CHENNAI observed as follows : -
QUOTE : The officer of the Excise Department conducted a verification of records and found that the petitioner has not reversed the credit availed on the inputs which were declared to be shortages and which were written off in their books for the years 1994-95 to 1998-99 and the value of which was Rs. 13, 36,134.33. According to the Department, if there is any shortfall, the petitioner ought to have intimated to the Department which has not been done and the availed credit should have been reversed which the petitioner failed to do. The petitioner provisionally debited an amount of Rs. 1.50 lakhs on 22/05/1999 towards the short fall of Modvat inputs and undertaken to pay the balance, if any. The petitioner declared the inputs as shortage and written off in the balance sheet. So, that shows that the goods are not available and it has not been used for in or in relation to manufacture of any excisable goods. Rule 57 I provides for recovery of credit wrongly availed or utilized in irregular manner. Hence, in respect of the goods which are found shortage and written off in the books of account on which credit has been taken, is sought to be reversed and in default of the same, penal consequences are taken against the petitioner. In the above said factual circumstances of the case, we do not find any question of law so as to direct the Tribunal to draw a statement of facts and refer the question to the High Court for resolution. UNQUOTE.
[for full text of the judgement, please visit http://www.taxesinindia.com and click on the citation taxind_2008_hc_mad_rcp_11]
HIGH COURT JUDGEMENT
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