2009 (3) TMI 791 - AT - Central Excise

Tribunal Orders Review of Modvat Credit Denial, Emphasizes Evidence & Law Compliance

RIDDHI STEEL & TUBE (P) LTD. Versus COMMISSIONER OF C. EX., AHMEDABAD-I

The Tribunal directed a review of the denial of Modvat credit based on the acceptance of the revised income tax return by the authorities. The judgment ... Cenvat/Modvat - Capital goods Issues:1. Denial of Modvat credit for capital goods due to claiming depreciation from income tax authorities.2. Dispute over acceptance of revised income tax return by the authorities.Analysis:Issue 1: Denial of Modvat CreditThe appellant was denied the benefit of Modvat credit for capital goods because they had claimed depreciation from the income tax authorities. The appellant argued that they subsequently filed a revised income tax return withdrawing the depreciation claim. While the benefit for the year 2002-03 was extended after the revised return was accepted, the benefit for the years 2003-04 and 2004-05 was not granted as the Commissioner (Appeals) required a copy of the final assessment from the income tax department. The appellant contended that since no income tax was payable, no assessment order was necessary. The Revenue did not dispute the filing of the revised return but argued that acceptance by the authorities was not proven.Issue 2: Acceptance of Revised Income Tax ReturnThe appellant's advocate argued that as per the income tax act, a revised return should be considered the actual return if not disputed by the authorities. The Revenue, however, contended that mere filing of the revised return was insufficient without evidence of acceptance. In response, the appellant stated that they had sought clarification from the income tax authorities. The Tribunal set aside the order and remanded the matter to the adjudicating authority to produce relevant provisions of law and clarification or acceptance of the revised income tax return by the authorities.In conclusion, the Tribunal directed a review of the denial of Modvat credit based on the acceptance of the revised income tax return by the authorities. The judgment emphasized the importance of providing evidence of acceptance and relevant provisions of law in such cases. Both appeals were disposed of with the decision to remand the matter for further consideration based on the clarification and acceptance of the revised income tax return.