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Issues:
1. Eligibility of CVD paid on fuel oil in vessels brought for breaking and Modvat credit eligibility. 2. Discharge duty on ship rate vs. fuel rate for oil in the engine room. Issue 1: Eligibility of CVD paid on fuel oil and Modvat credit: The judgment concerns the eligibility of Countervailing Duty (CVD) paid on fuel oil in vessels brought for breaking and Modvat credit eligibility. The decision references the case of Saibaba Ship Breaker Company, where it was ruled in favor of Revenue. Both parties agree with this decision. Consequently, the denial of credit is upheld based on the settled precedent. Issue 2: Discharge duty on ship rate vs. fuel rate for oil in the engine room: The advocate for the appellant argues that when oil is in the engine room, duty should be discharged at the ship rate, not the fuel rate. The advocate relies on the decision in the case of Ghaziabad Ship Breakers and requests the benefit of this decision and corresponding adjustment under Rule 57E. However, the original authority did not grant this benefit, citing lack of jurisdiction in the proceedings. The judgment states that if the assessment on the Bill of Entry (BE) was not in accordance with the law, it should have been challenged under the Customs Act, 1962, not under the Central Excise Act, 1944, and Modvat Cenvat Rules. The court finds that the present proceedings do not pertain to the assessment under the Customs Act, 1962. Therefore, the appeal is dismissed, confirming the orders of the lower authority. In conclusion, the judgment upholds the denial of Modvat credit based on settled precedent and dismisses the appeal regarding the discharge duty rate for oil in the engine room due to jurisdictional issues and the nature of the proceedings.
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