Assessee proposed to avail benefit of an Exemption Notification (Condition that no CENVAT Credit will be availed on inputs). The department has objected on the ground that the assessee is not an eligible unit as per the Exemption Notification. Assessee is still of the view that it is an eligible unit, and hence, duty was paid under protest.
For this purpose, the assessee has neither availed the Credit on inputs nor has he charged the CENVAT portion to P&L Account, rather the CENVAT Credit is kept in a separate account.
There may be two cases:
Case 1: Where finally Exemption is allowed after litigation, this credit would not be available.
Case 2: Where finally Exemption is disallowed even after litigation, this credit would be available.
Question - 1: In case 1 above, whether it is possible to treat the above CENVAT portion as an expense of prior period in P&L Account?
Question – 2: In case 2 above, whether it would be possible to avail the benefit of CENVAT credit on receipt of the final decision?
Please suggest as per the provisions of Central Excise Law.
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