TaxTMI 
TaxTMI 
2006 (11) TMI 493
X X X X Extracts X X X X
X X X X Extracts X X X X
....ailing and also in respect of 50% of unavailed portion, they availed depreciation. At the end of the second year, they availed the balance 50% of the credit. Revenue proceeded against the appellants on the ground that they had contravened Rule 4(4) of Cenvat Credit Rules, which states that the Cenvat credit of capital goods shall not be allowed in respect of that part of the value of capital goods which represents the amount of duty on such capital goods which the manufacturer claims as depreciation under Section 32 of the Income Tax Act, 1961. When the irregularity was pointed out, the appellants reversed the Cenvat credit taken under protest. The original authority, in the Orders-in-Original, appropriated the Cenvat credit reversed and fu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....aneously. In this case, with regard to Cenvat credit, since the appellant is allowed only 50% of duty as Cenvat credit, balance 50% being ineligible for Cenvat credit in that financial year, the appellant has rightly claimed depreciation on the said amount under the IT Act. There is no double benefit as presumed in the Show Cause Notice. Cenvat credit is availed on the 50% and depreciation is availed on balance 50% on which no Cenvat credit has been availed in that financial year. The appellant has not violated the law. The Commissioner has failed to substantiate the department's contention by way of any rules or case-laws. (ii) The demand is barred by limitation, as the appellant had not suppressed any information with a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d orders are legal and proper. 6. We have gone through the records of the case carefully. We reproduce the relevant provisions of Cenvat Credit Rules below :- Rule 4. Conditions for allowing Cenvat credit :- 4(2)(a) : The Cenvat credit in respect of capital goods received in a factory at any point of time in a given financial year shall be taken only for an amount not exceeding fifty percent of the duty paid on such capital goods in the same financial year : Provided that the Cenvat credit in respect of capital goods shall be allowed for the whole amount of the duty paid on such capital goods in the same financial year if the said capital goods are cleared as such in the same financial year. (b) The balance of Cenva....