2014 (4) TMI 645 - AT - Central Excise

Denial of CENVAT Credit - Depreciation on the CENVAT credit of duty paid on capital goods - Held that - Commissioner (Appeals) has discussed in the impugned order that the appellant has filed returns for the year 2008-09 and 2009-10 but they have not filed the return for the year 2007-08. In fact, the Commissioner (Appeals) does not have any knowledge of the assessment year for the income tax purpose which clearly says that for the period 01.04.2007 to 31.03.2008, the assessment year is 2008-09. As the appellant has filed revised return and did not claim depreciation on those capital goods by producing the IT Return, therefore, they are entitled for CENVAT credit for the capital goods as per the judgement of the Hon ble High Court of Bombay in the case of Maharashtra Electrosmelt Ltd. (2007 (6) TMI 224 - HIGH COURT OF JUDICATURE OF BOMBAY AT NAGPUR) - Decided in favour of assessee.

Summary

Issues:
1. Denial of CENVAT credit on capital goods due to claiming depreciation on CENVAT credit in Income Tax return for 2008-09.

Analysis:
The appellant appealed against the denial of CENVAT credit on capital goods for the years 2007-08 and 2008-09, as they had also claimed depreciation on the same CENVAT credit in their Income Tax return for the year 2008-09. The appellant argued that they had filed revised Income Tax returns for 2008-09 and 2009-10, not claiming depreciation as allowed under section 139(5) of the Income Tax Act, 1961. The appellant relied on a judgment of the Hon'ble High Court of Bombay in the case of CCE vs. Maharashtra Electrosmelt Ltd., which held that if an assessee gives up the claim of depreciation by filing a revised income tax return, the CENVAT credit on capital goods cannot be denied. The appellant requested the impugned order to be set aside and the appeal to be allowed.

The Commissioner (Appeals) noted that the appellant had filed returns for 2008-09 and 2009-10 but had not filed a return for 2007-08. The Commissioner (Appeals) lacked knowledge of the assessment year for income tax purposes, indicating that for the period 01.04.2007 to 31.03.2008, the assessment year was 2008-09. Since the appellant had filed a revised return without claiming depreciation on the capital goods and had produced the IT Return as evidence, they were found entitled to the CENVAT credit for the capital goods. The Tribunal relied on the judgment of the Hon'ble High Court of Bombay in the case of Maharashtra Electrosmelt Ltd. to set aside the impugned order, allowing the appeal with consequential relief. The stay application was also disposed of accordingly.