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2016 (7) TMI 592 - AT - Central ExciseCenvat Credit on capital goods - claiming depreciation under the Income Tax Law - Appellant relied upon the Chartered Accountants Certificate to argue that calculation made in the show cause notice and confirmed has been wrongly arrived at - Held that - As this issue of miscalculation/wrong calculation was not raised before the lower authorities, therefore, the case is required to be remanded to the adjudicating authority for verifying the claim of the Appellant. Appellant should also produce all the relied upon documents, including chartered accounts certificate produced before this bench. Needless to say that a personal hearing should be extended to the Appellant for explaining their case regarding correct calculation of Cenvat Credit required to be reversed. Imposition of penalty - Appellant enjoyed double benefits of taking Cenvat Credit and availing depreciation by suppressing the facts - Held that - When the provisions of Cenvat Credit Rules were abundantly clear then Appellant cannot claim ignorance of law for not imposing penalty. Accordingly penalty has been correctly imposed upon the Appellant. However, looking to the fact that the quantification of correct demand is required to be worked out by the Adjudicating Authority under this order, the amount of penalty on such re worked amount will be required to be calculated and Appellant will be entitled to option to pay 25% of such reduced penalty on the redetermined amount, along with interest, and 25% reduced penalty under Section 11 AC, if these amounts are paid within one month from the date of receipt of final order passed by the Adjudicating Authority in the remand proceeding.
Issues:
1. Simultaneous availment of Cenvat Credit on capital goods and claiming depreciation on the same capital goods under Income Tax Law. 2. Penalty imposition under Rule 15(2) of the Cenvat Credit Rules, 2004 read with section 11AC of the Central Excise Act, 1944. Issue 1: Simultaneous availment of Cenvat Credit and claiming depreciation: The Appellant filed an Appeal against the Order-in-Appeal passed by the Commissioner of Central Excise, Kolkata, regarding the simultaneous availment of Cenvat Credit on capital goods and claiming depreciation on the same capital goods under Income Tax Law for the financial years 2006-2007 and 2007-2008. The Appellant argued that the depreciation claimed and the corresponding calculation of Cenvat Credit required to be reversed had been wrongly done by the department. The Appellant relied on a Chartered Accountants Certificate to support the argument that the depreciation had been incorrectly calculated. The Tribunal noted that the issue of miscalculation/wrong calculation was not raised before the lower authorities. Therefore, the case was remanded to the adjudicating authority for verifying the Appellant's claim, and the Appellant was directed to produce all relevant documents, including the Chartered Accountants Certificate, for further examination. Issue 2: Penalty imposition under Rule 15(2) of the Cenvat Credit Rules: Regarding the imposition of a penalty, the First Appellate Authority found that the Appellant had enjoyed double benefits by taking Cenvat Credit and availing depreciation by suppressing facts. The Authority held that the provisions of Rule 4(4) of the Cenvat Credit Rules, 2004 were clear and did not allow simultaneous claiming of depreciation under the Income Tax Act and Cenvat Credit. The Authority imposed a penalty on the Appellant, stating that ignorance of the law could not be claimed. However, considering the need for correct quantification of demand, the Tribunal directed the Adjudicating Authority to rework the penalty amount. The Appellant was given the option to pay 25% of the reduced penalty on the redetermined amount, along with interest, within one month from the receipt of the final order passed by the Adjudicating Authority in the remand proceeding. In conclusion, the Appeal filed by the Appellant was allowed to the extent indicated, with the case being remanded for further verification and calculation of the penalty amount based on the revised demand.
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