9911796707
TMI Blog2006 (1) TMI 344X X X X Extracts X X X X X X X X Extracts X X X X ..... e proceeded against the appellants for denial of Modvat credit of CVD of Rs. 15,39,877/- for their failure to produce the requisite certificate/documents from KSFC in accordance with the provisions of Rule 57R of the erstwhile Central Excise Rules, 1944. The Original Authority apart from denying the Modvat credit, imposed a penalty of Rs. 50,000 under Rule 173Q for the contravention of Rule 57G read with Rule 57R. The Commissioner (Appeals) upheld the Original order in his Order-in-Appeal No. 218/2002-C.E., dated 28-3-2002. This is the impugned order which is strongly challenged by the appellants. 2. Shri G. Shivadass, learned Advocate appeared for the appellants and Shri K.S. Reddy leaned JDR appeared for the Revenue. 3. The learned Ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rental instalment or first hire purchase instalment or first instalment of re-payment of loan, as the case may be, along with a copy of the agreement entered into with the said financing company. (iii) The manufacturer and the financing company shall not claim depreciation under the Income Tax laws on that part of the value of capital goods which represents the amount of specified duty paid on such capital goods. A careful perusal of the said Rules reveals that in order to claim the Modvat credit, the appellant should have repaid the countervailing duty before payment of the first instalment of the loan to the financier. In the present case, the fact that CVD has been paid is not in dispute. Further the appellants have deposited th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... king credit of CVD paid, then KSFC cannot claim depreciation in view of the provisions of Rule 57R and Explanation 9 to Section 3 of the Income Tax Act. Reliance was placed on the decision of the Hon ble Apex Court in the case CC v. Tullow India Operation Ltd. [2005 (189) E.L.T. 401 (S.C.) = 2005 (TIOL) 134-SC] wherein it was held that non-compliance of a condition beyond the assessee s control and powers cannot result in the denial of a substantial benefit. In the peculiar facts and circumstances of the case, the denial of Modvat credit to the appellants on the ground that KSFC has not furnished the required certificate would result in gross miscarriage of justice. Taking into account the legal position that KSFC cannot claim depreciation ..... X X X X Extracts X X X X X X X X Extracts X X X X
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