Ccr

I have one client -SSI-his aggregate clearannce upto dec 11 -below 150 lac & after that exceeded 150 lac now a/d to CCR rules since he is taking benefit of EN 8/2003 so he can't avail/take CCR in books on I/Ps lying in stock/FPupto october .now since he had passed all entries bifurcating excise duty element [for all purchases] -now if i reverse the total amt of CCr on raw material upto 150 lacs then whether it violates CCR.For tax purposes i have to adapt a single method i.e. either inclusive/exclusive.Even for sales though there is no ED liability till 150 lac clearancesbut then also after oct i have to separate it since clearences value ecxceeded 150 lacs.now i cant follow both methods i.e. exclusive as well as inclusive.

In above case i think i shd separate ed element & recverse that ed component relating to the period [1/4/11 to dec 11] I just want to know what method shd be followed considering GN issued by ICAI relating to tax audit as well as ST rules .If i reverse that whether it attracts penalty of rule 14 for taking ccr wrongly.

one more point that if i reverse it it's going to increase purchases that means my purchased upto dec 11 follow inclusive method & after that follows exclusive method .for sales how can i follow both methods & one more point abt sales even though I am issuing excise invice from 1/4/11 itself ........
what treatment shd be followed -ssi period & normal assessee

In the light of the CCR, 2004 there is no auch limitation that within a year Ed component on inputs cannot be reversed, even in Tax Audit it is not material that how much purchase has been reversed with a year. As far as tax audit is concerned, if in a year one has booked the entire ED as purchase and then they try to reverse in any subsequent year, then it is to be disallowed as a business expenditure. But please keep in mind that eligibility of CENVAT credit cannot be defined until and unless depreciation is charged on the ED component as Capital Goods. Hence there is no penalty and no statutory liability that will accrue if you reverse the ED an book it as purchase or vice versa within the same year, provided that you have taken the eligible credit and you are eligible to avail CENVAT Credit.

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Ajit kumar Dubey

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