Case Details: Yee Kay Technocrat Pvt. Ltd. Versus Commissioner, Goods and Service Tax Commissionerate, Faridabad (2025) 29 Centax 255 (P&H.)
Judiciary and Counsel Details
- Arun Palli & Sudeepti Sharma, JJ.
- Shri Deepak Gupta, Adv., for the Appellant.
- S/Shri Anshuman Chopra, Sr. Standing Counsel with Deepesh Kakkar, Adv., for the Respondent.
Facts of the Case
The petitioner, a manufacturer registered under Central Excise, availed Cenvat Credit on capital goods, including the excise duty component forming part of their value. Simultaneously, the petitioner claimed depreciation under Section 32 of the Income Tax Act, 1961 on the same capital goods value, thereby availing a double benefit. The Department found this in violation of Rule 4(4) of the Cenvat Credit Rules, 2004, which prohibits credit where depreciation is claimed on duty amounts. Upon objection, the petitioner revised its income tax return for 2003-04 on 31-05-2005. However, for the disputed years—2001-02 and 2002-03—the petitioner neither revised the returns nor surrendered the depreciation claim or paid additional tax. Consequently, the Department initiated recovery proceedings under Rule 14 of the Cenvat Credit Rules, 2004 for wrongful availment of credit.
The Assistant Commissioner issued an order disallowing the Cenvat Credit and imposing a penalty. The petitioner appealed this decision to the Commissioner of Central Excise (Appeals), who modified the order. Dissatisfied with this modification, the petitioner filed a further appeal before the Customs, Excise, and Service Tax Appellate Tribunal, which upheld the original decision. The petitioner has now approached the Punjab and Haryana(P&H) High Court, seeking relief from the Tribunal’s order.
High Court Held
The Hon’ble High Court held that the petitioner had claimed a double benefit by availing both Cenvat Credit and depreciation under the Income Tax Act on the duty component of capital goods. This was in violation of Rule 4(4) of the Cenvat Credit Rules, 2004, which prohibits the availment of Cenvat Credit on goods for which depreciation has been claimed. As a result, the petitioner became liable for the recovery of the wrongly taken Cenvat Credit under Rule 14 of the Cenvat Credit Rules, 2004. The Court affirmed the Tribunal’s decision, dismissing the appeal and upholding the disallowance of the Cenvat Credit.
List of Cases Reviewed
- Yee Kay Technocrat Pvt. Ltd. — dated 25-1-2011 by CESTAT — Affirmed [Paras 1, 6, 12]
