2017 (2) TMI 1070

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....facture of excisable goods, namely paper and paperboard falling Chapter Heading 48 of the Central Excise Tariff Act, 1985. They have availed CENVAT credit of Rs. 39,50,149/- on capital goods, procured on lease basis from one M/s B.G. India Energy Services Pvt. Ltd under agreement dated 28.2.2006. Alleging that the lessor had availed the benefit of depreciation under Section 32 of the Income Tax Act, 1961, and credit being not admissible to the Appellant, it was proposed to be recovered by issuance of show cause notice on 14.3.2012 with proposal for imposition of penalty. On adjudication, the demand was confirmed with interest and equal amount of penalty. Aggrieved by the said order, the appellant filed appeal before the ld. Commissioner (Ap....

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.... for recovery of the credit availed in 2008 is barred by limitation. 4. Per contra, the ld. A.R. for Revenue on the other hand submitted that the judgment cited by the ld. Advocate is not applicable to the facts of the present case inasmuch as in the said case, the CENVAT credit on the capital goods was disallowed for non-production of a certificate issued by the lessor to the lessee. It was not the case that the lessor has availed the depreciation and the lessee was allowed the Credit. It is his contention that in the present case, the lessor M/s Gujarat Gas Co. Ltd. has availed depreciation under Section 32 of the Income Tax Act, 1961, therefore, the appellant-lessee cannot claim the CENVAT credit on the same capital goods. He has submit....

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....r the appellants are eligible to CENVAT credit on the goods received from M/s B.G. India Energy Services Pvt. Ltd. (known as M/s Gujarat Gas Co. Ltd.) under lease arrangement. It is not in dispute that the said lessor had availed  depreciation under Section 32 of Income Tax Act, 1961 on the entire value of the capital goods including the excise duty component on which the Appellant availed CENVAT Credit. Before proceeding to examine the rival contention, it is necessary to refer to the relevant Rule 4(4) of CENVAT Credit Rules, 2004 which reads as under: "(4) The CENVAT credit in respect of capital goods shall not beallowed in respect of that part of the value of capital goods which represents the amount of duty on such capital goods....