2013 (2) TMI 468 - AT - Central Excise

Waiver of demand - Stay petition - CENVAT credit on capital goods - Rule 4 (4) of Cenvat Credit Rule 2004 - Depreciation claim on amount of CENVAT credit on capital goods - Appellant claims to have had made amends in their books of accounts and consequently there was no more claim of depreciation under the Income Tax Act. - Held that - there is no valid documentary evidence of the appellant having relinquished their claim of depreciation. no copy of any revised Income Tax assessment order is available on record. Therefore, the assessee has no prima facie case on merits. Waiver of pre-deposit rejected and Stay petition allowed subject to deposit of duty.

Summary

Issues:
1. Waiver and stay of CENVAT credit and penalty amount.
2. Denial of CENVAT credit on capital goods due to simultaneous availment of depreciation under the Income Tax Act.
3. Lack of valid documentary evidence of relinquishment of claim of depreciation.
4. Pre-deposit of duty amount and compliance requirements.

Analysis:
The appellant filed an application seeking waiver and stay regarding the denial of CENVAT credit amounting to Rs.3,32,800/- and an equal penalty. The denial was based on the simultaneous availment of depreciation on capital goods under the Income Tax Act during the financial year 2007-08. The appellant claimed to have made amends in their books of accounts, ceasing further claims of depreciation under the Income Tax Act. However, the learned Superintendent pointed out the absence of valid documentary evidence supporting the appellant's relinquishment of the depreciation claim. Citing a relevant case, Commissioner vs. Suprajit Engineering Ltd., where the department's appeal was allowed, denying CENVAT credit due to simultaneous depreciation benefits under the Income Tax Act, the Tribunal found that the appellant lacked a prima facie case on merits. Moreover, the application did not include any plea of financial hardships. Consequently, the Tribunal directed the appellant to pre-deposit the duty amount of Rs.3,32,800/- within six weeks and report compliance. If the compliance is met, there will be a waiver and stay regarding the penalty amount. A certified copy of the order is to be issued to the appellant promptly.

This judgment highlights the importance of providing valid documentary evidence to support claims and the need for a prima facie case on merits in seeking waiver and stay in such matters. It also emphasizes the significance of complying with pre-deposit requirements and timely reporting of compliance to the authorities. The decision underscores the Tribunal's adherence to legal provisions and precedents in determining the outcome of appeals related to CENVAT credit and depreciation benefits under the Income Tax Act.