2008 (3) TMI 780 - HC - Central Excise

Summary

Issues involved: Modvat credit on parts/components of D.G. Set received by the assessee, who is not the manufacturer of the D.G. Set. Entitlement for credit on parts/components of D.G. Set when a complete D.G. Set was received from the supplier.

Summary:
The reference application was admitted by the High Court concerning the correctness of allowing modvat credit on parts/components of D.G. Set to the assessee, who did not manufacture the D.G. Set but received it from another person. The Revenue raised questions on the entitlement of the assessee for credit on parts/components of D.G. Set received from their supplier. The Commissioner had earlier disallowed modvat credit to the respondent, alleging irregular availing of the credit. The assessee had received parts/components of D.G. Sets and availed modvat credit without disclosing that the components belonged to another entity. The Tribunal found that the components received by the assessee were covered under the definition of capital goods, and they had paid duty on them. Citing precedents, the Tribunal held that the assessee was entitled to claim modvat credit on the duty paid components. The High Court noted that the Tribunal's decision was consistent with previous judgments and no contrary view was presented. As there were no substantial questions of law arising, the application for reference was dismissed.