If assessee wrongly take depreciation on credit portion but on later return revised on realizing mistake, assessee can avail credit – Allahabad High Court

Abhishek Synthetics v. CCE in Appeal No. E/209/2002 (High Court – Allahabad)

In this matter, it was decided that the appellant has an option of either taking MODVAT credit or claiming depreciation. Once an option is exercised, it is not irreversible. The benefit of MODVAT credit under the Central Excise Rules cannot be denied merely on the ground that depreciation was claimed under the Income Tax in the Income Tax Return of the applicant even when he files the revised income tax return. In case depreciation was claimed on capital goods under Income Tax by mistake, but later revised return was filed on realising the mistake. Once the income tax return is revised, then CENVAT credit become regularized. It was held that CENVAT credit cannot be denied.