Case Law Details
Nagesh Knitwears Pvt. Ltd. Vs ACIT (ITAT Delhi)
Primarily, we find that the writing off of unutilized CENVAT credit has been allowed by the revenue in the A.Y. 2010-11. Notwithstanding that, we have examined the issue. The assessee is in the business of manufacturing of woolen, cotton and blended hosiery knitwears declared taxable income of Rs.2.57 crores. Whenever the Excise Duty is written off at the time of surrender of excess registration certificate as the assessee would no longer be in a position to utilize the Excise Duty. The assessee pays CENVAT on purchase of raw material and claims benefit of set off against Excise Duty payable on manufactured items. The assessee increases the value of the purchases in respect of duty paid in the form of AED but the same could not be adjusted against the CENVAT rules because on the finished goods only the basic duties levied. Therefore, the difference of loss incurred on account of rate differential between input and output Excise Duty is allowed to be claimed as business expenditure. This is generally a regular practice in the manufacturing sector which is also followed by the assessee from year to year. The CENVAT credit receivables which could not be set off has been rightly claimed by the assessee as deduction.
FULL TEXT OF THE ORDER OF ITAT DELHI
The present appeal has been filed by the assessee against the order of ld. CIT(A)-37, Delhi dated 28.02.2018.
2. Following grounds have been raised by the assessee:
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