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2016 (7) TMI 592 - AT - Central Excise


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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