Cenvat Credit on capital goods if depreciation is claimed under incometax

[Guest]

Sir,My client has claimed cenvat credit on capital goods.By mistake the have provided depreciation also.The Audit Officers are insisting to pay back cennvat credit  before finalising the audit and before issuing ythe audit report to avoid penalty.Is there any caselaws that abandoning depreciation by filing revised excise return and stick to retaining of cenvat credit on capital goods to minise the loss?

AI Summary

Client Faces Cenvat Credit Repayment Due to Depreciation Claim Error; Revising Tax Return May Resolve Issue Per Rule 4(4). (4) A client mistakenly claimed both Cenvat credit and depreciation on capital goods, prompting audit officers to demand repayment of the Cenvat credit to avoid penalties. According to Rule 4(4) of the Cenvat Credit Rules 2004, claiming depreciation disallows Cenvat credit. Experts agree with the audit officer's stance but suggest that not claiming depreciation is more beneficial due to the higher percentage benefit of Cenvat credit. If the client files a revised income tax return removing the depreciation claim, they might retain the Cenvat credit, supported by precedent cases where similar actions were upheld by courts.