ORDER
T.K. Jayaraman, Member (T)
1. The appellant has filed an application for stay of the operation of the Order-in-Appeal No. 130/2005-CE, dated 29-12-2005 and for full waiver of the pre-deposit amount of duty and penally each amounting to Rs. 2,29,841/-.
2. Shri V. Raghuraman, the learned Advocate appeared on behalf of the appellants and the learned JDR, Shri K. Sambi Reddy, appeared for the Revenue.
3. The short point involved in this dispute is the claim of depreciation on account of the Cenvat credit on the Capital Goods. It is the contention of the appellants that there is enough evidence to show that they have not availed any depreciation from the Income Tax Department on that portion of the Cenvat credit which has been availed on the Capital Goods. The Income Tax Returns is the actual evidence in this proposition. However, the lower authorities have not accepted this on the ground that the figures in the Income Tax Returns do not tally with the Books of Accounts. The Commissioner (Appeals) has denied the credit on account of the fact that the journal has not been reduced and he has come to the conclusion that the order of the lower authority is correct. The duty involved is Rs. 2,29,841/- only. Equal penalty has been imposed.
4. The learned SDR fairly concedes that there is enough evidence to show that the appellants have not claimed depreciation on that portion of the Cenvat credit on the Capital Goods.
5. We have gone through the records of the case carefully. As the issue lies within a short compass, we are taking up both stay and appeal together. The revenue proceeded against the appellants alleging simultaneous availment of Cenvat credit and depreciation under Section 32 of Income Tax Act, thereby violating Rule 57 R(8) of Central Excise Rules/Rule 4(4) of Cenvat Credit Rules 2001/2002. The lower authorities have confirmed the demand. After going through the Income Tax Returns, we find that depreciation under Income tax has been claimed after deducting the Cenvat credit amounting to Rs. 13,31,101/-. In our view, this is a clear evidence to show that the appellants have not violated the provisions of Rule 57 R(8) of Central Excise Rules/Rule 4(4) of Cenvat Credit Rules 2001-02. In other words, there is no simultaneous availment under the provisions of Income Tax Act as well as Cenvat Credit Rules 2001/2002. We agree with the learned Advocate that there is no intention to evade payment of duty and, therefore, the longer period cannot be invoked. The findings of the Commissioner (Appeals) that the appellants have availed both Cenvat credit and the depreciation without the knowledge of the department is not borne out by facts as can be seen from the Income Tax Returns. The learned Advocate’s submission that the figures in the Books of Accounts will not tally with those in the Income Tax Returns on account of the fact that the depreciation under the Companies Act is quite different from that under the Income Tax Act requires consideration. In these circumstances, the demand of the credit availed and imposition of equal penalty are not warranted. While allowing the stay application for granting waiver of pre-deposit amount, we take up the appeal itself for final decision. In view of our observations supra and after due examination of the evidence produced, we are inclined to allow the appeal itself. Stay and Appeal are allowed.
(Pronounced and dictated in open Court)