TMI Blog2005 (7) TMI 228X X X X Extracts X X X X X X X X Extracts X X X X ..... ons under Rule 57T of the Central Excise Rules, 1944, wherein they had declared that they would not claim depreciation on the value of the goods under Section 32 of the Income-tax Act. But, on verification of records, it appeared to the Central Excise authorities that the appellants had claimed depreciation under the Income-tax Act on the total value of the capital goods including the element of d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessing authority revised the assessments for the assessment years 1995-96, 1996-97 and 1997-98 under Section 154 of the Income-tax Act. Ld. Consultant filed copies of these revised assessment orders. In the circumstances, Consultant contended, it could not be held that the appellants had availed the above Modvat credit illegally or irregularly with intent to evade payment of duty and therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - There is no evidence, on record, of withdrawal of depreciation claim as regards the amount of Rs. 83,489 - Rs. 42,863 = Rs. 40,626/-. Hence it has to be held that capital goods credit to the extent of Rs. 40,626/- has been irregularly taken. However, the question whether any part of the credit of Rs. 83,489/- was taken irregularly has not been debated before me. The contentious issue in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f value equivalent to Modvat credit on the capital goods under Section 32 of the Income-tax Act. But they did not honour this declaration. They took Modvat credit on the capital goods and, at the same time, claimed depreciation in the IT returns filed before the IT authorities. It is clear from these facts that, at the time of filing Modvat declaration under Rule 57T, they were bent on claiming de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osable on the appellants under Rule 57U(6) as well as under Rule 173Q(l)(bb). However, the penalty of Rs. 83,489/- appears to be higher than what is reasonable. I have already found that there is evidence of depreciation claim of Rs. 42,863/- having been withdrawn by the appellants under the Income tax Act. Having regard to this fact, I am inclined to reduce the penalty on the appellants to Rs. 40 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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