Tribunal confirms demand & penalty against appellant for depreciation claim on Modvat Credit

The tribunal upheld the order confirming a demand of Rs.33,893 and penalty imposition against the appellant for claiming depreciation on amounts also utilized as Modvat Credit. The appellant's failure to inform the department about utilizing Cenvat credit on capital goods, coupled with the withholding of information, led to dismissal of the appeal under Section 35B(1) of the Central Excise Act, 1944. The tribunal found the appellant's challenges unsubstantiated, resulting in the dismissal of the appeal and disposal of the stay application.

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Issues:
1. Challenge to order confirming demand and penalty imposition based on depreciation claimed.
2. Time bar for issuing show cause notice.
3. Failure to inform department about utilization of cenvat credit on capital goods.
4. Appellant's withholding of information leading to conscious and deliberate action.
5. Dismissal of appeal under Section 35B(1) of the Central Excise Act, 1944.

Analysis:
1. The appellant contested the order confirming a demand of Rs.33,893 and imposition of an equal penalty, challenging the Commissioner (Appeals) order. The appellant, engaged in manufacturing VP sugar/molasses, availed Cenvat credit on inputs and capital goods. The issue arose when the appellant claimed depreciation under the Income Tax Act, 1961, on amounts also claimed as Modvat Credit. The Revenue contended that depreciation could only be claimed on non-Modvat Credit amounts, leading to a show cause notice for recovery. Despite multiple hearing opportunities, the appellant failed to adequately respond, citing difficulty in tracing records due to a retired assistant.

2. The tribunal found that the appellant did not inform the department about utilizing Cenvat credit on capital goods while simultaneously claiming depreciation under the Income Tax Act. The show cause notice was deemed not time-barred as the suppressed facts were unearthed by Revenue officers. The appellant's failure to challenge the duty liability and produce required documents, even after the notice, led to a total credit involvement of Rs.33,893. The belated claim of not taking Cenvat credit of Rs.25,270 lacked supporting evidence, indicating a deliberate withholding of information by the appellant.

3. The authorities' findings, supported by cogent reasoning and material on record, were deemed sufficient, warranting no interference with the grounds raised in the appeal memorandum. The appellant failed to establish a prima facie case for appeal admission, resulting in the summary dismissal under the second proviso to Section 35B(1) of the Central Excise Act, 1944, as the fine and penalty did not exceed Rs.50,000. Consequently, the stay application was disposed of accordingly.

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