2013 (12) TMI 1134 - AT - Central Excise

Claiming cenvat credit on inputs for manufacturing capital goods is allowable without double benefit

The Appellate Tribunal CESTAT Chennai held that claiming cenvat credit on inputs for manufacturing capital goods alongside depreciation under income-tax ... Double benefit - CENVAT Credit on capital goods - Availment of depreciation on the same capital goods - Held that:- prima facie it appears that the demand is not sustainable. No double benefit has been taken in respect of capital goods, which is prohibited under the law. In this case, the credit has been taken in respect of the inputs and there is no charge in the show cause notice that the credit on the inputs is not admissible. Hence, the requirement of pre-deposit is waived during the pendency of the appeal - Decided in favour of assessee. The Appellate Tribunal CESTAT Chennai ruled that taking cenvat credit on inputs used in the manufacture of capital goods is permissible, even if depreciation is claimed on the capital goods under income-tax law. The demand was found to be not sustainable as no double benefit was availed. Pre-deposit requirement was waived during the appeal.