Cenvat Credit and Depriciation, Central Excise

[Mehul Pandya]

Sir,

My query is regarding capital goods cenvat and Depreciation calculation.

For example I am buying one capital goods of ₹ 1000/- + ₹ 15 Excise Duty.

Hence Can I avail cenvat credit of ₹ 7.5 in the current year and balance in the next year as far as CCR,2004 concerns whereas I will claim depreciation only on ₹ 1000/- i.e. excluding duty amount. Is this allowable from the both IT and CCR Rules.

Posts / Replies

[Naveed S]

Sir,

Depreciation under I.Tax is availed on the capital goods value excluding the excise duty portion credit, on which capital goods cenvat credit is availed.

[Mehul Pandya]

Thank you for your reply,

It means I can take benefit of Cenvat Credit and Depreciation as per above mentioned example.

Can you please suggest any notification,circular or case laws favoring the same.

[Rajesh Nathoo]

Dear Mehul ,

It is allowed both under IT and CCR Rules , Go through sub Rule 4 of Rule 6 of CCR Rules .

[Naveed S]

Yes Sir, you can avail the benefit of cenvat credit and depreciation as per your above mentioned example.

You may also refer to sub rule 4 of rule 4 of Cenvat Credit rules, 2004.