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2002 (4) TMI 741 - AT - Central Excise
Issues:
1. Availing of Modvat credit and income-tax depreciation simultaneously. Analysis: The judgment dealt with the issue of availing Modvat credit and income-tax depreciation simultaneously during the financial year 1995-1996. The Commissioner (Appeals) noted that the appellants had received certain equipment and availed Modvat credit while also claiming income-tax depreciation. This led to the initiation of recovery proceedings by the department. The appellants contended that they had not actually availed income-tax depreciation and had filed a revised declaration to clarify this. The Assistant Commissioner of Income-tax had not granted the depreciation based on the Modvat claim filed by the appellants. The Tribunal referred to previous orders where similar issues had been remanded for fresh consideration in light of the Income-tax Act provisions and accounting practices followed by the appellants. The Tribunal cited cases such as M/s. K.V. Mills v. CCE and GTV Spinners Ltd., where matters were remanded for reevaluation based on the judgment that unless depreciation is allowed by the Income-tax Department, Modvat credit cannot be denied merely based on the claim made by the assessee. The Tribunal directed the matter to be remanded to the Commissioner (Appeals) for de novo consideration in accordance with the directions provided in the previous cases. The impugned order was set aside, and the appeal was allowed by way of remand to the Commissioner (Appeals) for fresh assessment. In conclusion, the judgment focused on resolving the issue of simultaneous availing of Modvat credit and income-tax depreciation. It emphasized the need for a thorough reconsideration of the matter in line with the provisions of the Income-tax Act and relevant accounting practices. The decision to remand the case for de novo consideration aimed to ensure a fair assessment based on the directions provided in previous similar cases, thereby providing clarity and guidance on such complex issues.
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