Written off inputs/capital goods - Wiping the creases on the forehead of Revenue

By Vijay Kumar

The Board is at it again, going after mole hills. They have now amended the Cenvat Credit Rules to provide for reversal of credit when inputs/capital goods are written off. A netizen wrote to us,

This Notification appears to be contrary to primary provisions of Central Excise Law. The question of payment of duty/reversal of credit arise on any excisable goods only on removal of such goods from the factory. Here, however, the reversal is insisted based on the action taken for the purpose of books of accounts. Further it is not provided as to the treatment to be given to cases where the goods after a gap of reversal of credit are physically removed from the factory. It is not clear as to the nature of document to be prepared, the procedure for the receiver of such goods to avail credit. The notification appears to have been issued in haste.

Please see a detailed analysis of the new Rule in our Breaking News.