Cenvat Credit on Capital Goods if depreciation is claimed under Income Tax

[Laxmaiah Vanamamula]

Dear sir, we have claimed cenvat credit on capital goods.By mistake we have provided depreciation also in Fy 2010-11 fr above and the same was deducted in the asset block in FY 2011-12.

the Audit officers are asking/insisting Pay back cenvat credit amount along with intest and penal under section 11A(6) of Central excise Act 1944

so, please suggest me, what we can do?

Thanking you sir,

V.Laxmaiah

[YAGAY andSUN]

Reverse the CENVAT credit, pay the statutory interest and penalty.

[dipsang vadhel]

Both Depriciation ( on amount of Taxes for which you have claimed CENVAT)and CENVAT credit can not be claimed at the same time. reverse the CENVATcredit and pay the statutory interest and penalty.

AI Summary

CENVAT credit cannot coexist with claimed depreciation; reversal required, with statutory interest and penalty obligations. Claiming CENVAT credit on capital goods together with Income Tax depreciation for the same tax element is not permitted; both cannot be claimed simultaneously. The operative consequence advised is reversal of the CENVAT credit and payment of statutory interest and a penal amount under the applicable excise provisions.