2024 (6) TMI 1260

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....credit of duty paid on the inputs, input services and capital goods. 1.1. Upon examining the records of the Appellant for the period April 2003 to September 2006, the Central Excise Revenue Audit (CERA) Authorities, vide their Audit Report dated 04.01.2007, raised an objection that on scrutiny of the financial records, it is observed that the Appellant had a balance of Cenvat credit of Rs.92,09,883/- but the Appellant has accounted only Rs.8,88,224/- as asset under "Loans & advances" in the Balance Sheet, thereby undervaluing the asset to the extent of Rs.83,21,659/-, which would be utilized later on. The report alleged that the excise duty on inputs procured is charged as expenditure to 'cost of raw material consumed', thereby resulting....

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....thority. Therefore, for this reason also Cenvat credit availed by the appellant cannot be disputed. In support of his submission, he placed reliance on the following judgments:- SHREE PANDURANG SSK LTD. Versus COMMISSIONER OF CENTRAL EXCISE, PUNE-III [2017 (52) S.T.R. 69 (Tri. -Mumbai)] AARTI INDUSTRIES LTD. Versus COMMISSIONER OF C. EX. & S.T., VAPI [2017 (349) E.L.T. 756 (Tri. - Ahmd.)] 3. Shri Satyapal Singh Vikal, Learned Assistant Commissioner (AR) appearing on behalf of the Revenue reiterates the finding of the impugned order. 4. On careful consideration of the submission made by both the sides and perusal of record, we find that the entire case for denial of Cenvat credit was made out by the department only on....

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.... limit to utilize the balance Cenvat credit and there is no one to one co-relation between the inputs and the finished products, such availment of double benefit may escape notice. 3. Accordingly, Board desires that field formations under your charge may be sensitized against the unintended dual benefit availed of by certain assessees on account of treatment of unutilized CENVAT credit balance at the year end. In case the CENVAT credit balance has been treated as expenditure in Profit and Loss account and has not been written off in Books of Accounts, the concerned Income Tax authorities should be suitably intimated. The audit parties should also keep this aspect in mind while conducting audit. 4. Receipt of the circular m....

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.... iii) Input must be received in the factory of production iv) Input should be used in the manufacture of final product v) Manufactured goods out of such input should be cleared on payment of duty From the entire case it can be seen that the above compliances/conditions have not been violated by the appellant and the same is not under dispute even by the department. Accordingly, since the appellant have scrupulously complied conditions for availing the Cenvat Credit on input, only because different effect assumed as per income tax the Cenvat credit cannot be denied. 4.2 Somewhat the similar issue has been considered by this Tribunal in the Case of Shree Pandurang SSK Ltd (Supra) wherein Tribunal has passed the fol....

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.... (4) The Cenvat credit in respect 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 or provider of output service claims as depreciation under section 32 of the Income-tax Act, 1961 (43 of 1961). On going through the above rule, it is clear that restriction in availing credit if the depreciation availed, is only in respect of capital goods and not on services. Admittedly the Cenvat credit involved in the present case is of service tax paid on the services even though it is related to erection and installation of capital goods. Since there is no explicit provisions to restrict the Cenvat credit on input s....