2017 (11) TMI 1432 - AT - Central Excise

CENVAT credit - capital goods - simultaneous availment of credit and depreciation - case of Revenue is that the revised returns filed by the appellant after the due date would not regularize the credit wrongly taken by the appellant - Held that - All the documents produced by the appellant would go to show that the appellant has taken steps to rectify the defect - since the appellant has rectified the mistake of taking CENVAT credit as well as depreciation under Income Tax Act, the demand is unsustainable - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Availing CENVAT credit on capital goods while also claiming depreciation under the Income Tax Act.
- Recovery of irregularly availed credit, interest, and penalty.
- Consideration of revised returns and acknowledgment by the Income Tax Department.
- Legal validity of demand raised by the authorities.

Analysis:
1. The appellant was alleged to have availed CENVAT credit on capital goods and depreciation under the Income Tax Act simultaneously, leading to a show cause notice for recovery of irregularly availed credit, interest, and penalty. The original authority confirmed the duty wrongly availed credit and imposed penalties. The Commissioner (Appeals) upheld the demand but set aside a portion of the penalty. The appellants then approached the Tribunal, challenging the decision.

2. The appellant's counsel argued that the error in availing both credits was rectified by filing revised returns before the Income Tax authorities, supported by acknowledgments and auditor's certificates. The counsel contended that the revised returns were accepted for subsequent periods, and no queries were raised by the Income Tax Department. However, the authorities did not consider these submissions.

3. On the other hand, the respondent's representative reiterated the findings of the impugned order, stating that filing revised returns after the due date does not regularize the wrongly taken credit. The respondent argued that there was no evidence of the Income Tax Department accepting the revised returns, thus justifying the demand raised.

4. After hearing both sides, the Tribunal considered the documents provided by the appellant, including revised returns, acknowledgments, and auditor's certificates. The Tribunal noted that these actions demonstrated the appellant's efforts to rectify the mistake. The appellant also cited a relevant judgment to support their case.

5. The Tribunal concluded that since the appellant rectified the error by correcting the CENVAT credit and depreciation issue, the demand made by the authorities was unsustainable. Therefore, the impugned order was set aside, and the appeal was allowed with any consequential relief deemed necessary.

This comprehensive analysis of the legal judgment highlights the issues involved, arguments presented by both parties, and the Tribunal's decision based on the evidence and legal principles applied during the proceedings.