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TMI Blog2016 (11) TMI 1285X X X X Extracts X X X X X X X X Extracts X X X X ..... case, the contention of department that the respondent can avail only 50% of the balance of ₹ 12,32,337/- in the subsequent year, lacks legal basis - CENVAT credit allowed - decided in favor of respondent-assessee. - Appeal No.E/2331/2011 - FINAL ORDER No.A/31042/2016 - Dated:- 19-10-2016 - Ms. Sulekha Beevi, C.S., Member (Judicial) Shri Gunaranjan, AR for the Appellant. Shri S.Narayana , Advocate for the Respondent. [Order per: Sulekha Beevi, C.S.] 1. The respondents are engaged in the manufacture of fasteners such as MS bolts, HTS bolts, plates and covers made of mild steel, copper inserts etc.,and articles of plastics. During the year 2006-07, the respondent undertook job work for M/s Amara Raja Batteries Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t aside the order passed by the original authority. Hence the present appeal. 3. On behalf of the department the LR AR, Shri Guna Rajan submitted that the respondent after having availed the benefit of depreciation under the IT Act, 1961, in the year of receipt of the capital goods, ought not to have availed the cenvat credit on capital goods in the subsequent year. He also stressed the point that in the subsequent year, the respondent would be eligible for 50% of the balance amount only and the credit of ₹ 12,32,336/- availed by the respondent is against law. 4. The Ld. Counsel Shri S.Narayana appearing on behalf of the respondent, opened his arguments by adverting to the relevant provision laid in Rule 4(4) of Cenvat Credit Ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are cleared as such in the same financial year. Provided further that the CENVAT credit of the additional duty leviable under sub-section (5) of section 3 of the Customs Tariff Act, in respect of capital goods shall be allowed immediately on receipt of the capital goods in the factory of a manufacturer. Provided also that where an assessee is eligible to avail of the exemption under a notification based on the value of clearances in a financial year, the CENVAT credit in respect of capital goods received by such assessee shall be allowed for the whole amount of the duty paid on such capital goods in the same financial year. Explanation. - For the removal of doubts, it is hereby clarified that an assessee shall be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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). 7. The above provision does not bar the assessee form taking cenvat credit on capital goods in the subsequent year after availing benefit of depreciation under IT Act in the year of receipt of capital gods. The respondent has earned credit of ₹ 17,07,038/- in the year of receipt of capital goods. He would be eligible for credit of 50% in the same year and the balance 50% can be availed in the subsequent year. In that case, the contention of department that the respondent can avail only 50% of the balance of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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