Judgment:
1. After examining the records and hearing both sides, I find that the appeal itself can be disposed of finally at this stage. Accordingly, after dispensing with pre-deposit, I proceed to deal with the appeal.
2. The lower authorities denied capital goods credit of Rs. 2,80,275 to the appellants under Rule 12 of the Cenvat Credit Rules, 2002 on the ground that the party had simultaneously availed depreciation of the value of the goods for income-tax purposes for the assessment year 2001-02. They have also imposed a penalty of Rs. 10,000/- on the party under Rule 13 of the above Rules. It is submitted by learned counsel for the appellants that the jurisdictional Asst. Commissioner of Income-tax has since deducted the Cenvat value of the goods from computation of taxable income. A certified copy of the assessment order dated 6-9-2006 has also been produced by counsel, which indicates that Cenvat credit of Rs. 2,80,275/- has been deducted by the income-tax assessing authority. Consequently, there is no simultaneous availment of Cenvat credit on the capital goods and depreciation of its value for income-tax purpose. However, it is up to the original-authority to consider the income-tax assessment order and pass fresh order on the Cenvat credit issue. Therefore, the orders of the lower authorities are set aside and the case is remanded to the original authority for fresh decision in accordance with law. It goes without saying that the authority shall take into account the assessment order dated 6-9-06 of the Asst. Commissioner of Income -tax Circle-1, Virudhunagar and give the appellants a reasonable opportunity of being heard.