Writing Down Inputs for Income Tax Purposes not same as Writing-Off Inputs under Rule 3 (5B) of CCR: CESTAT rules in favour of SAIL

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) ruled that writing down inputs for income tax purposes is not the same as writing off inputs under Rule 3(5B) of the CENVAT Credit Rules. The case involved Steel Authority of India Ltd. (SAIL), which had written down the value of inputs in its financial statements and claimed CENVAT credit. The tax authorities disallowed the credit, arguing that the inputs were written off. However, the CESTAT held that writing down the value of inputs for accounting purposes does not constitute a write-off under the CENVAT Credit Rules. This ruling provides clarity on the interpretation of Rule 3(5B) and supports taxpayers in claiming CENVAT credit for inputs that are written down but not written off.