Cenvat credit and withdrawn depreciation claims: credit is not barred on double-benefit grounds if revised returns are accepted.

Cenvat credit on the duty element of capital goods cannot be denied merely because depreciation was initially claimed if revised income-tax returns withdraw that depreciation claim and the withdrawal is accepted by the income-tax authorities. The double-benefit objection then ceases to operate, and credit is allowable on merits. However, the factual position as to whether depreciation was in fact claimed on the duty element, and whether the revised claim was accepted, must be verified by the original adjudicating authority, so the matter was remanded for that limited examination.

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Issues: Whether cenvat credit on the duty element of capital goods could be denied on the ground that depreciation had been claimed, and whether filing of revised income-tax returns withdrawing such depreciation claim entitled the assessee to credit.

Analysis: The disputed credit turned on whether the assessee had obtained a double benefit by claiming depreciation on the duty component of the capital goods while also availing cenvat credit. The Tribunal noted that where revised returns are filed and the depreciation claim is withdrawn and accepted by the income-tax authorities, the bar against double does not survive and the cenvat credit cannot be denied on merits. On the materials before it, the issue was covered by earlier Tribunal decisions and the view of the High Court, but the figures in the revised return and the acceptance of the revised claim required verification by the original adjudicating authority.

Conclusion: The issue on merits was decided in favour of the assessee, but the matter was remanded to verify whether the revised depreciation claim had been accepted and whether depreciation had in fact been claimed on the duty element.

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