2017 (1) TMI 696

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..... availing CENVAT credit of duty paid on inputs and capital goods and utilized the same towards payment of duty on the finished goods. In the month of September 2004, appellant procured capital goods/machinery being plastic and rubber processing machinery and parts thereof, circular loom and accessories and parts thereof falling under Chapter 84 on payment of Central Excise duty vide invoice dated 24.9.2004. Appellant paid an amount of Rs. 33,63,044/- towards said machinery which include basic excise duty of Rs. 4,44,800/- and education cess of Rs. 8,896/-. The appellant debited the plant and machinery account with the cost of the capital goods being Rs. 33,63,044/- on 28.9.2004. Appellant claimed depreciation on an amount of Rs. 52,37,656/- .....

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..... 2004. He further submitted that Rule 4 of CCR provides certain conditions for allowing CENVAT credit. Rule 4(4) provides that CENVAT credit in respect of capital goods is not be allowed in respect of that part of the value of the capital goods which represent the amount of duty on such capital goods which the manufacturer claims as depreciation under Section 32 of the Income Tax Act, 1961. He further submitted that the purpose of Rule 4(4) is to ensure that the assessee does not simultaneously claim the depreciation of duty paid under the income tax law as well as the credit of duty paid under the Central Excise law, resulting in a double benefit. He further submitted that as along as double benefit has not been availed, the provision of R .....

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..... hinery account has reduced by the amount of excise. 5. On the other hand, the learned AR has defended the impugned order and submitted that as per the scheme of CENVAT credit, the appellant is not entitled to take double benefit of CENVAT credit as well as depreciation and in this case he has availed both the benefit which is not permitted as per CCR. 6. After considering the submissions of both the parties, I find that as per sub-rule 4 of Rule 4 of CCR, there is a prohibition for availing CENVAT credit as well as depreciation under the Income Tax Act. In this case, the appellant has availed 50% CENVAT credit in the first year and 50% in the second year and when it was pointed out that they have also claimed depreciation, then they recti .....

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