CENVAT Credit - Removal of capital goods - Depreciation - ...

CENVAT Credit: Depreciation deduction of 2.5% applies from date of availing credit, not from receiving/using capital goods. Rules 3(5), 3(5A), 4(2) interpreted.

Case Laws     Central Excise

August 9, 2024

CENVAT Credit - Removal of capital goods - Depreciation - Deduction of 2.5% to be applied from the date of availing credit, not from the date of receiving or putting to use the capital goods - Rule 3(5) and Rule 3(5A) and Rule 4(2) of CCR - Though capital goods received at the same time, Rule 4(2) restricts availment of credit to 50% of duty paid on capital goods in a financial year - Legislature conscious of Rule 4(2) while introducing Rule 3(5A) - Ordinary meaning of "from the date of availing the credit" to be followed - No ambiguity to be read into - Appellant's calculation applying deductions on 100% from date of availing initial credit incorrect - Time limitation - No wilful suppression of facts established - Appellant paid amount as per their calculation and filed ST3 returns reflecting reversal of credit - Show cause notice time-barred - Appeal allowed on ground of limitation.

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