2009 (1) TMI 569 - AT - Central Excise

Summary

Issues:
Claim of Cenvat credit on capital goods under Central Excise Act, 1944 vs. depreciation claim under Income-tax Act, 1961.

Analysis:
The appellant contended that they are entitled to Cenvat credit on capital goods, stating that due to an inadvertent mistake, they could not claim the credit earlier as depreciation was claimed under the Income-tax Act, 1961. They reversed the depreciation claim and sought Cenvat credit under the Central Excise Act, 1944. The appellant argued that since the claim is permissible under the law, pre-deposit should not be enforced. The counsel emphasized that Rule 4(4) of Cenvat Credit Rules has an overriding provision, allowing only one benefit to the assessee, either under Section 32 of the Income-tax Act, 1961 or under the Central Excise Act, 1944.

The Departmental Representative (DR) supported the lower authorities' decision, referring to Para 9 of the adjudication order. After hearing both sides and examining the records, the Tribunal noted that Rule 4(4) of the Cenvat Credit Rules prevails, permitting only one benefit to the assessee. The Tribunal found no provision in the Central Excise law to grant Cenvat credit on capital goods if the appellant withdraws its claim under the Income-tax Act. Consequently, the Tribunal ruled that there was no evidence to support waiving the pre-deposit requirement. Therefore, the appellant was directed to deposit Rs. 30 lakhs as a pre-deposit for the appeal hearing, with the option to pay in three equal installments. The first installment was due on 30th January, 2009, the second on 27th February, 2009, and the third by 10th March, 2009, with compliance required by 17th March, 2009. Failure to make any installment payment would result in the entire amount being demanded by the revenue authorities, and non-compliance would vacate the order. However, if the directed deposit was made, the realization of the remaining demand would be stayed during the appeal's pendency.