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2021 (9) TMI 1250 - AT - Central ExciseRecovery of MODVAT Credit - capital goods - depreciation on the invoice value under Section 32 of Income Tax Act - HELD THAT:- It cannot be disputed that appellant have claimed depreciation of the value of the capital goods which represent the specified duty paid by them on these capital goods and have also claimed the modvat credit of the same. From the plain reading of the Rule 57 R (5) as it existed from 1994 onwards, it is clear that the pre requisite for claiming the modvat credit of the specified duty paid on capital goods, appellants should have not claimed the depreciation of that part of the value of the capital goods which represented the specified duty. Having claimed the depreciation under Section 32 of the Income Tax Act, 1962 of the value representing the specified duty, appellants are not allowed the modvat credit of that amount. Appellants have sought to justify their action by taking recourse to the accounting practice. When the rules clearly provide that amount claimed as modvat credit should not be part of the value on which depreciation is claimed appellants are barred. It is settled principle in law that when statue provides a manner for doing some things then that is the only manner in which it is to be done and all other manner of doing the same barred. Since the appellants have taken the inadmissible credit, the demand of interest in respect of the inadmissible credit is justified in terms of provisions of. It is now settled law that interest under Finance Act, 1994 is statutory liability put on the person who has unduly withheld the amounts due to government - Further when it is held that appellants by way of making misdeclaration have availed of the modvat credit which was not admissible to them the penalty imposed on them is justified. Appeal dismissed - decided against appellant.
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