2007 (3) TMI 615 - AT - Central Excise

Summary

Issues involved:
The denial of Modvat credit for capital goods used in job-work basis without payment of duty.

Summary:
The authorities denied Modvat credit for capital goods used in manufacturing goods on job-work basis without duty payment. The appellant argued they also manufactured goods themselves, albeit in small quantities. The Revenue doubted these transactions and confirmed the demand. The Commissioner called for a report which confirmed the procurement of raw materials and clearance of final products on duty payment, despite missing transport documents. The Commissioner denied the benefit, stating the manufacturing was solely to avail credit for capital goods used in job-work. However, the Tribunal disagreed, emphasizing that the goods were used predominantly for exempted products, entitling them to Modvat credit. The Tribunal cited previous cases to support this interpretation.

The appellant also argued that the capital goods were later used for manufacturing dutiable goods, clearing them on duty payment. They relied on a previous Tribunal decision to support their claim. Additionally, the Tribunal found the demand barred by limitation, as there was no suppression of information by the appellant. Consequently, the Tribunal set aside the impugned order, allowing the appeal on both merits and limitation.