Per M.V. Ravindran : This appeal is filed against the Order-in-Appeal No. BR/206/Th.II/2006 dated 07/12/2005, which upheld the order-in-original denying the Cenvat credit to the appellants on the capital goods.

2. The relevant facts which arises for consideration are that the appellants had in the financial year 2001-2002 purchased capital goods and availed Cenvat credit 50% of the amount of duty paid on such capital goods in that financial year. In the same financial year, the appellants availed depreciation under Section 32 of the Income Tax Act, 1961 on the balance 50% of the amount of duty, which was not taken as Cenvat credit in the Financial year 2001-2002. The appellants availed 50% balance Cenvat credit of the amount of duty paid on capital goods during the financial year 2002-2003. Show cause notice was issued to the appellants for showing cause as to why this amount of credit availed by them in the financial year 2002-2003 be not denied, as it was in violation of provisions of Rule 4 of the Cenvat Credit Rules, 2001 and Cenvat Credit Rules, 2002. The appellant contested the show cause notice on the ground that they had not availed the depreciation on the amount of Cen