2016 (7) TMI 591

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.... present case is that the appellant have purchased the capital goods involving total duty of Rs. 2,09,656/-. The appellant in the year 2004-05 availed cenvat credit to the tune of 50%, i.e. amounting to Rs. 104828/- and remaining 50% capitalized and claim the depreciation on the total assessable value and 50% of excise duty, i.e. Rs. 104828/-. In the year 2005-06, the appellant reduced an amount of Rs. 104828/- from the capital account and availed cenvat credit of the said amount as remaining 50%. The show cause notice was issued proposing denial of cenvat credit. The adjudicating authority on the ground that appellant is not entitle for the cenvat credit in terms of Rule 4(4) of Cenvat Credit Rules, 2004. Aggrieved by the order-in-original....

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....Cen. Ex.& S.T., Bangalore vs. Suprajit Engineering Ltd. - 2010 (253) E.L.T. 369 (Kar) the Cenvat Credit in respect of 50% credit cannot be allowed on the ground that the assessee had claimed the benefit of depreciation under Section 32 of Income Tax Act, 1961. Therefore, the issue of the present case squarely covered by aforesaid judgment and accordingly the order of Ld. Commissioner (Appeals) liable to be upheld. 5. I have carefully considered the submissions made by both the sides. 6. I find that in the year 2004-05, the appellant have availed cenvat credit of 50% of the total duty, i.e. Rs. 104828/-, however on this amount the appellant have not claimed the depreciation, therefore the first 50% credit availed by the appellant is no....

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....ciation under the Income Tax Act, the depreciation is allowed every year till the value of the capital goods becomes nil, that means the total amount of excise duty, if claimed as depreciation, then the cenvat credit shall not be admissible. 6.3 As per Rule 4(4), it clearly provides that only part of the value of capital goods which represents the amount of duty on such capital goods, which the assessee claimed as depreciation shall not be allowed as cenvat credit. In the present case, the part of the value, which claimed as depreciation, is Rs. 16569/- only. Therefore, to this extent the appellant is not entitle for the cenvat credit, however the remaining amount, i.e. Rs. 88263/- (Rs. 104832-16569/-) is eligible as cenvat credit to the....