Thiru Arooran Sugars Ltd. Vs. Commissioner of Central Excise, Trichy - Court Judgment

This matter arises for the second time before the Tribunal. On hearing both sides for some time on the stay application, I find that the appeal itself can be disposed of at this stage. Accordingly, after dispensing with predeposit, the appeal is taken up.

2. The facts of the case, in a nut shell, are that the appellants had availed CENVAT credit on capital goods during 2002-03 and 2003-04 in terms of the relevant Rules. The original authority had allowed credit only to the extent of Rs.2,82,950/- and denied the balance on the ground that the benefit of depreciation had also been availed under the Income Tax Act insofar as the balance duty of Rs.2,33,074/- was concerned. The decision of the original authority had been sustained by the Commissioner (Appeals). As the assessee had made a claim for the first time before the Tribunal challenging the order of the first appellate authority that the lower authorities did not have an occasion to examine the relevant income tax assessment orders and as the appellants claimed that they were in a position to establish that they had not availed depreciation including the credit availed (on the strength of IT assessment orders), vide Final Order No.472/07 dt. 1.5.07, this Tribunal remanded the matter to the original authority to pass a fresh decision after perusing the evidence sought to be furnished by the appellants and affording an opportunity to them for an effective hearing. The impugned order has been passed in appeal against an order of the original authority in terms of the said final order of the Tribunal.

3. The lower authorities passed similar orders as was considered by the Tribunal before passing the remand order since the appellants failed to produce the revised IT assessment orders claiming depreciation on capital goods excluding the credit availed.

4. In the appeal before the Tribunal, the appellants have submitted that they were not in a position to plead before the lower authorities that they had not availed impugned credit and simultaneously claimed depreciation for the same amount in the IT returns for the relevant year since the they were not in possession of the revised IT return. Ld. counsel for the appellants reiterates this position and furnishes a copy of the revised assessment orders of the IT department for the relevant period. Ld. JCDR has no objection to remanding the matter to the original authority for deciding the matter afresh in the circumstances.

5. I have carefully considered the facts of the case and the rival submissions. The impugned demand came to be raised on the appellants for their having simultaneously availed capital goods credit of Rs.2,33,074/- while claiming the depreciation on the capital goods including this amount also in its value. Applicable interest for delay in paying the demand was also ordered to be paid. In addition, a penalty equal to duty demanded was imposed on the appellants under Section 11AC of the Act read with relevant rules of CCR. Now that the appellants are in possession of revised assessment orders in respect of the impugned machinery reducing the claim for depreciation by the disputed credit, the impugned demand and penalty cannot be sustained. As this assessment order was not produced before the authorities, the matter is remanded to the original authority to decide the issue afresh after going through revised assessment order and hearing the appellants on the dispute. The appeal is thus allowed by way of remand.