2018 (5) TMI 1187

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....hutter. During the course of business appellant availed cenvat credit on various capital goods purchased during the years 2004-05, 2006-07 and 2007-08 as per the Cenvat Credit Rules 2004. They have also availed depreciation on the value of capital goods which represented the 50% of the cenvat credit during the said financial year in terms of Section 32 of the Income Tax Act. As per Rule 4(4) of the Cenvat Credit Rules, appellant is not eligible to avail the benefit of cenvat credit on capital goods 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. Department alleged that the appellant had....

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....l Audit Party of the Department visited the factory of the appellant in October 2005 and raised the objection but the proceedings upon that issue was dropped consequent to the reply filed by them. Further a second audit party of the Department also visited the unit in 2009 and the same audit objection vide Audit Note No. 121/2009 dated 08.0402010. He further submitted that despite awareness of the methodology employed by the appellants and having all of the relevant information since the original audit in 2005, a show-cause notice was finally issued by the Assistant Commissioner only in 04.11.2010 invoking the longer period of limitation which is completely barred by limitation. In support of this submission, he relied upon the decision in ....

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....ice was issued by the Department on 04.11.2010 only after the decision rendered by the High Court of Karnataka in the case of CCE Vs. Supraiit Enaineerinq Ltd. (supra) holding that the assessee cannot claim depreciation under Section 32 of the Income Tax Act in respect of non-utilized cenvat credit and claiming benefit of depreciation under the Income Tax Act. 4.  On the other hand the learned AR defended the impugned order. 5.  After considering the submissions of both the parties and perusal of the material on record, I find that as far as merit is concerned, the case is covered against the appellant in view of the judgment of the Karnataka High Court in the case of Supraiit Enqineerinq Ltd. cited supra. Now coming to the ques....