Appeal Granted for CENVAT Credit on Capital Goods

The Tribunal allowed the appeal in favor of the appellant, holding that once depreciation claimed in income tax returns is reversed and certified, the appellant is entitled to CENVAT credit on capital goods. The Tribunal relied on established legal principles and case law precedents to support this decision, granting consequential relief to the appellant.

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Issues: Admissibility of CENVAT credit on capital goods when depreciation claimed under the Income Tax Act was subsequently reversed in revised income tax returns.

Analysis:

The appellant filed an appeal against the order disallowing CENVAT credit of Rs. 11,73,596/- along with interest, as the appellant had claimed depreciation of capital goods under Section 32 of the Income Tax Act, 1961. The Adjudicating Authority also imposed a penalty under Rule 15(2) of the Cenvat Credit Rules, 2004. The Senior Advocate for the appellant argued that the excess depreciation claimed was corrected in the revised Income Tax Returns for the assessment years 2006-2007 to 2009-2010, and a certificate was produced to show the correction. The argument was supported by various case laws establishing that once depreciation claimed in income tax returns is reversed and certified, the appellant can avail CENVAT credit simultaneously.

The Authorized Representative for the Revenue contended that the revised income tax returns were filed only for the period 2006-2007 to 2008-2009, as mentioned in the order passed by the first appellate authority. However, the Senior Advocate countered this argument by pointing out that revised income tax returns for the financial year 2010-2011 were also filed, surrendering the depreciation claimed for the assessment years 2006-2007 to 2009-2010, as certified by a Chartered Accountant.

After considering the arguments from both sides and reviewing the case records, the Tribunal observed that the issue at hand had been settled by previous case laws, including the decision in Commissioner of Central Excise, Surat-I vs Utsav Silk Mills. The Tribunal noted that once depreciation claimed in income tax returns is reversed and certified, the appellant is entitled to CENVAT credit. Therefore, the appeal was allowed in favor of the appellant based on the settled legal proposition, granting consequential relief as applicable.

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