2017 (3) TMI 859 - AT - Central Excise

CENVAT credit - denial on the ground that the appellants have claimed the depreciation on the capital goods as well as cenvat credit, accordingly they availed double benefit - Held that - appellant says that they have claimed the depreciation in the books of accounts the same was reversed in the income tax return. If this is so, the appellant has not claimed depreciation - However, both lower authorities have not considered properly the document submitted by the appellant to justify that the depreciation was not claimed on the amount of cenvat credit availed by them - appeal allowed by way of remand.

Summary

Issues:
- Availment of credit on capital goods
- Claiming of depreciation and cenvat credit
- Rejection of appeal by Commissioner (Appeals)
- Consideration of documents by lower authorities

Analysis:
The case involved the appellant availing credit on capital goods, which was denied by the adjudicating authority due to the alleged claiming of depreciation on the same capital goods, resulting in double benefit. The appeal before the Commissioner (Appeals) was rejected on the same ground, leading to the appellant approaching the Tribunal. The appellant argued that they reversed the depreciation in their income tax return, including the cenvat credit amount, thus not claiming double benefit. A chartered accountant certificate and a submitted chart supported this claim, indicating non-claiming of depreciation in the income tax return.

The revenue, represented by the ld Asstt. Commissioner, reiterated the findings of the impugned order, upholding the demand confirmation. It was argued that since the appellant availed depreciation, they were not entitled to cenvat credit under Rule 57R(5). The Tribunal carefully considered both sides' submissions and noted that although the appellant claimed depreciation in their books, it was reversed in the income tax return, implying non-claiming of depreciation. The Tribunal found that the lower authorities did not properly consider the documents submitted by the appellant to justify the non-claiming of depreciation on the cenvat credit amount. Consequently, the matter was remanded to the adjudicating authority for further consideration.

The Tribunal granted the appellant liberty to provide all necessary documents to establish their non-claiming of depreciation. It clarified that even if the appellant claimed depreciation in their books but reversed it in the income tax return, it would amount to non-availment of depreciation, making the credit admissible. Both appeals were disposed of by way of remand to the original adjudicating authority, emphasizing the importance of proper consideration of the appellant's documents to determine the eligibility for credit.