M/S. Jayashree Cables and Conductors (P) Ltd. Vs. Cce, Salem - Court Judgment

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CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Chennai
Decided OnFeb-17-2010
Case NumberAppeal No. E/184 of 2009
Judge THE HONOURABLE MS. JYOTI BALASUNDARAM, VICE PRESIDENT
AppellantM/S. Jayashree Cables and Conductors (P) Ltd.
RespondentCce, Salem
Advocates:Shri S. Janakiraman, Advocate for the Appellants. Shri C. Rangaraju, SDR for the Respondent.
Excerpt:
in this case the assessee initially took credit of rs.1,18,384/- and also availed benefit of depreciation under the provisions of the income tax act, simultaneously which is not permissible in law. however, even before it being pointed out by the central excise authorities, the claim for depreciation benefit was withdrawn before the income tax authorities and the assessees also paid interest under the income tax act. the excise authorities have held that in view of the above, the assessees are entitled to take credit; however penalty of amount equal to the credit availed and held to be admissible has been imposed and the appellants are aggrieved by such penal action. 2. i have heard both sides. the assessee cites various decisions of the tribunal some holding that when the credit disallowed is nil [as in the present case], penalty should also be nil. however, there are other decisions retaining some amount of penalty after drastic reduction of quantum. 3. in view of the above, i hold that penal action is called for against the assessees. but having regard to the case laws cited by the learned counsel for the assessee, i reduce the penalty to rs.10,000/- (rupees ten thousand only). the appeal is thus partly allowed as above.
Judgment:

In this case the assessee initially took credit of Rs.1,18,384/- and also availed benefit of depreciation under the provisions of the Income Tax Act, simultaneously which is not permissible in law. However, even before it being pointed out by the Central Excise authorities, the claim for depreciation benefit was withdrawn before the Income Tax authorities and the assessees also paid interest under the Income Tax Act. The excise authorities have held that in view of the above, the assessees are entitled to take credit; however penalty of amount equal to the credit availed and held to be admissible has been imposed and the appellants are aggrieved by such penal action.

2. I have heard both sides. The assessee cites various decisions of the Tribunal some holding that when the credit disallowed is nil [as in the present case], penalty should also be nil. However, there are other decisions retaining some amount of penalty after drastic reduction of quantum.

3. In view of the above, I hold that penal action is called for against the assessees. But having regard to the case laws cited by the learned counsel for the assessee, I reduce the penalty to Rs.10,000/- (Rupees ten thousand only). The appeal is thus partly allowed as above.