2008 (4) TMI 607 - AT - Central Excise

Summary

Issues involved:
The issues involved in the judgment are the permissibility of claiming Cenvat credit and depreciation on the total cost of D.G. set including Central Excise Duty under Section 32 of Income Tax Act, 1962, the imposition of penalty under Section 11AC of the Central Excise Act, 1944, and the bar of limitation in the demand of duty.

Permissibility of Cenvat credit and depreciation:
The Respondent purchased D.G. sets involving Central Excise Duty and claimed Cenvat credit and depreciation on the total cost, which was found impermissible under Rule 4(4) of the Cenvat Credit Rules, 2002. The Respondent voluntarily reversed the credit upon detection by the Audit party, leading to the Adjudicating Authority appropriating the amount. The Commissioner (Appeals) set aside the order on the ground of limitation, but the Tribunal found that the demand of duty was not barred by limitation as the duty was voluntarily deposited by the Respondent.

Imposition of penalty:
The Adjudicating Authority imposed a penalty under Section 11AC of the Central Excise Act, 1944. However, the Tribunal agreed with the Commissioner (Appeals) that there was no suppression of facts with intent to evade payment of duty. Consequently, the Tribunal held that the penalty and interest imposed were not sustainable.

Judgment:
After considering the arguments and records, the Tribunal upheld the demand of duty confirmed and appropriated by the Adjudicating Authority. The Tribunal modified the order of the Commissioner (Appeals) by affirming the demand of duty but ruling out the sustainability of penalty and interest. The appeal was disposed of accordingly.