AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2019 (4) TMI 17
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....ch he claimed as depreciation from income tax. It was found that the appellant claimed both CENVAT Credit and depreciation on the same goods including the CENVAT component. Department felt that the appellant was ineligible for credit of capital goods in view of Rule 4(4). 3. After the show cause notice was issued to them, the appellant filed a revised income tax return with the Income Tax Department reducing the depreciation amount which they initially claimed. While checking the matter, the lower authority dropped the recovery of CENVAT Credit in view of the revised Income Tax return, reducing the depreciation amount. However, he confirmed the demand of interest from the date of taking the CENVAT Credit to the date of rectifying the mis....
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....question is whether the appellant is liable to pay interest for a period when they have taken credit till they have revised the income tax returns. The ratio of the two judgments of the Tribunal on this account is that Rule 4(4) prohibits taking of credit on capital goods and simultaneously availing the depreciation on the duty element of such capital goods. The mere fact that they have availed depreciation disentitles them to credit. The subsequent filing of revised income tax return might have amounted to reduction of depreciation claim, but it does not make the original claim correct and accordingly the demand is sustainable. However, in this case the demand has been dropped by the lower authorities which has not been appealed against by....
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....r a legal obligation to ensure that they have availed the credit properly, by following the procedure and stipulations specified under the law. The appellant, being under the self-assessment scheme, should be aware of the statutory provisions to be observed while availing the credit, for which they are entitled. But, the appellant have availed the impugned Cenvat Credit on capital goods irregularly and utilized the same for payment of duty with an intention to evade payment of duty in contravention of the provisions of Rules 3 and 4 of the Cenvat Credit Rules, 2004, thus gaining undue financial accommodation. Further, it is observed that there is no basis for the bona fides claimed by the appellant in view of the ....
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....4, inasmuch as they had taken the Cenvat Credit on capital goods for which Document 2 they were not entitled with an intention to evade payment of the duty, as their duty obligations were made good by utilization of the irregular credit. Apparently, it was only after the Audit Party notified the irregularity to them that they filed the revised Income Tax returns seeking to withdraw the depreciation claim. Thus, it is a fit case for invoking the proviso to sub-section (1) of Section 11A of the Central Excise Act, 1944 read with Rule 14 of the Cenvat Credit Rules, 2004, for recovery of the irregularly availed Cenvat Credit for the extended period of five years along with interest under Section 11AB of the Central Exc....
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....w as to how the date of audit when the department came to know of the irregularity becomes relevant date in the light of the above provision defining the relevant date under Section 11A." - (ii) In the case of Gujarat Alkalies & Chemicals Ltd., -vs- Commissioner of C.Ex., Vadodara-I, as reported in 2010 (262) E.L.T. 753 (Tri. Ahmd.), the Hon'ble Tribunal held that- - "Cenvat/Modvat -Capital goods - Depreciation - Once a manufacturer claims depreciation which treats the expenditure towards specified duty as Revenue expenditure, he cannot avail the same as Cenvat credit Appellant claimed full depreciation which was allowed by income-tax authorities in the year in which plant Document 3 and machinery was p....