IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH

212 Reserved on: January 08, 2025 Pronounced on: January 28, 2025 M/S YEE KAY TECHNOCRAT PRIVATE LIMITED .....APPELLANT Versus COMMISSIONER, GOODS AND SERVICE TAX COMMISSIONERATE, FARIDABAD .....RESPONDENT CORAM: HON'BLE MR. JUSTICE ARUN PALLI HON'BLE MRS. JUSTICE SUDEEPTI SHARMA Present: Mr. Deepak Gupta, Advocate for the appellant.

Mr. Anshuman Chopra, Sr. Standing Counsel with Mr. Deepesh Kakkar, Advocate for the respondent.

SUDEEPTI SHARMA, J.

1. The present appeal is preferred under Section 35G of the Central Excise Act, 1944 (for short ‘Act 1944’) for quashing impugned order dated 25.01.2011 (Annexure A-3), whereby, the learned Tribunal dismissed the appeal of the appellant holding that the appellant is not entitled to benefit of CENVAT Credit.

2. The brief facts of the case, as per Order-in-Original, are that the appellant is the manufacturer of Engineering Plastic Components and was availing facility of CENVAT Credit under CENVAT Credit Rules; 2002/2004.

3. During the course of audit of the financial and excise records of the assessees, it was noticed by the Audit party, that the assessees had availed of CENVAT Credit amounting to `2,78,012/- of duty paid on Capital Goods and at the same time, claimed depreciation of this part of value of capital goods which represents the amount of duty on such capital goods under Section 32 of the Income Tax Act, 1961, which appeared to be a violation of the provisions of Rule 4 (4) of the CENVAT Credit Rules, 2004 (erstwhile CCR, 2002) resulting in excessive availment of CENVAT Credit by the appellant.

4. The appellant, by their letter dated 24.07.2006, admitted the fact of having taken double benefit by availing of CENVAT Credit as well as claiming of depreciation under the Income Tax Act, of that amount of duty which formed a part of the value of such Capital Goods, which benefit according to them worked out to be `2,88,779/- and not `2,78,012/- as pointed out by the Audit party. It was also informed that revised Income Tax return with the Income Tax department had been filed by them.

5. Since it appeared that the CENVAT Credit amounting to `2,88,779/- (Rupees Two Lac Eighty Eight Thousand Seven Hundred and Seventy Nine Only)

taken in respect of the capital goods was availed of wrongly in violation of the provisions of Rule 4 (4) of the CENVAT Credit Rules, 2004/2002 and that the said wrong availment could not be made good by filing a revised Income Tax return with the Income Tax Department by reversing the said depreciation benefit already availed of as claimed by the appellant and that the said wrong availment of credit was done wilfully and intentionally with a view to evading payment of duty and suppressed the said fact from the department and that the department got knowledge of it only on conducting audit of the appellant accounts, a show cause notice was issued to the appellant, who filed response to the same and after giving him personal hearing, the CENVAT credit amounting to `2,88,779/- (Rupees Two Lac Eighty Eight Thousand Seven Hundred and Seventy Nine Only) availed by the assessee was disallowed under Rule 14 of the CENVAT Credit Rules, 2004 read with Section 11A of the Act, 1944. Further, penalty to the tune of `2,88,779/- under Section 11 AC of the Act, 1944 read with Rule 15 (2) of the CENVAT Credit Rules, 2004 was imposed in Order-in-Original by the Assistant Commissioner on 26/31.12.2007.

6. The appellant preferred appeal against order dated 26/31.12.2007 before the Commissioner of Central Excise (Appeals), whereby learned Commissioner (Appeals) modified the impugned Order-in-Original vide order dated 01.05.2009, which was again challenged by the appellant before learned Customs, Excise and Service Tax Appellate Tribunal by way of filing appeal. Learned Tribunal, vide order dated 25.01.2011, dismissed the appeal filed by the appellant. Hence, the present appeal.

7. Learned counsel for the appellant contends that the le