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TMI Blog2013 (7) TMI 337X X X X Extracts X X X X X X X X Extracts X X X X ..... d in 2005-06, the appellant took 50% of the duty paid thereon as CENVAT credit amounting to Rs. 1,75,172.26. For income tax purposes, this amount was deducted from the value of the capital goods arid depreciation was claimed on the balance amount. In respect of the same goods, the appellant took the balance 50% of CENVAT credit (Rs. 1,75,172.26) in 2006-2007 but this amount was not deducted from the value of the goods for claiming depreciation for income tax purposes. Insofar as the capital goods received in the factory in 2006-07 are concerned, 50% of the duty paid thereon was taken as CENVAT credit amounting to Rs. 1,00,626/- and equivalent amount was deducted from the value of the goods for claiming depreciation for income tax purposes. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing income tax returns for the subsequent financial years. In other words, the contravention, if any, of Rule 4(4) of the CENVAT Credit Rules 2004 was undone and therefore the denial of the entire CENVAT credit taken on the capital goods is not justified. In this connection, the learned counsel claims support from the decision in the case of Commissioner of Central Excise, Coimbatore Vs. Ennar Spinning Mills [2009 (246) ELT 263 (Tri-Chennai)]. In any case, according to the learned counsel, there is no justification for imposing penalty on his client. In this context, it is submitted that nothing was suppressed with intent to avail undue CENVAT credit. The clerical mistake committed by the party was promptly rectified as soon as it was notif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s for the purpose of claiming depreciation for income tax purposes. Even this "principle" was not followed in the next financial year. This procedure adopted by the appellant was clearly in contravention of Rule 4(4) of the CENVAT Credit Rules 2004, which reads thus: "The CENVAT credit in respect of capital goods shall not be allowed in respect of that part of the value of capital goods which represents the amount of duty on such capital goods, which the manufacturer or provider of output service claims as depreciation under section 32 of the Income-tax Act, 1961 (43 of 1961)." 5. As per the above provision, a manufacturer of excisable goods claiming CENVAT credit of the duty paid on capital goods received in his factory must ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt was not to be seen in that case. Moreover, the issue with its complexion found in the instant case was not raised in the cited case of Ennar Spinning Mills (supra). Therefore, the case law cited by the learned counsel is no precedent for the instant case. 6. For the reasons already noted, it has to be found that the appellant wrongly availed CENVAT credit while simultaneously claiming depreciation for income tax purposes in the year of receipt of capital goods in the factory as also in the subsequent financial year. The credit wrongly availed has to be denied, which is what was done by the lower authorities. 7. Coming to the penalty-related issue, I find that the show-cause notice invoked Rule 15 of the CENVAT Credit Rules 2004 read wi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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