Tribunal grants CENVAT credit on capital goods for 2007-08 and 2008-09

The Tribunal allowed the appeal, setting aside the denial of CENVAT credit on capital goods for the years 2007-08 and 2008-09. The appellant's filing of revised Income Tax returns for the relevant years, without claiming depreciation on the same CENVAT credit, was found to entitle them to the credit. Relying on a precedent from the High Court of Bombay, the Tribunal granted the appellant the CENVAT credit on capital goods and provided consequential relief, disposing of the stay application.

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Issues:
1. Denial of CENVAT credit on capital goods due to claiming depreciation on CENVAT credit in Income Tax return for 2008-09.

Analysis:
The appellant appealed against the denial of CENVAT credit on capital goods for the years 2007-08 and 2008-09, as they had also claimed depreciation on the same CENVAT credit in their Income Tax return for the year 2008-09. The appellant argued that they had filed revised Income Tax returns for 2008-09 and 2009-10, not claiming depreciation as allowed under section 139(5) of the Income Tax Act, 1961. The appellant relied on a judgment of the Hon'ble High Court of Bombay in the case of CCE vs. Maharashtra Electrosmelt Ltd., which held that if an assessee gives up the claim of depreciation by filing a revised income tax return, the CENVAT credit on capital goods cannot be denied. The appellant requested the impugned order to be set aside and the appeal to be allowed.

The Commissioner (Appeals) noted that the appellant had filed returns for 2008-09 and 2009-10 but had not filed a return for 2007-08. The Commissioner (Appeals) lacked knowledge of the assessment year for income tax purposes, indicating that for the period 01.04.2007 to 31.03.2008, the assessment year was 2008-09. Since the appellant had filed a revised return without claiming depreciation on the capital goods and had produced the IT Return as evidence, they were found entitled to the CENVAT credit for the capital goods. The Tribunal relied on the judgment of the Hon'ble High Court of Bombay in the case of Maharashtra Electrosmelt Ltd. to set aside the impugned order, allowing the appeal with consequential relief. The stay application was also disposed of accordingly.

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