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2000 (2) TMI 136 - AT - Central Excise
Issues: Disallowance of Modvat credit amounting to Rs. 14,79,862/-
The judgment pertains to an appeal filed against the disallowance of Modvat credit totaling Rs. 14,79,862. The appellants, engaged in manufacturing motor vehicles, were contesting the disallowance of Modvat credit after the adjudicating authority confirmed a portion of the disallowance. The main contentions revolved around the disallowance of Modvat credit on chemicals used in the paint shop, cables affixed on motor vehicles, and air conditioners installed in certain vehicles. The appellants argued that the disallowance was factually inaccurate and should be reconsidered. The Chartered Accountant representing the appellants cited relevant legal precedents to support their case, including decisions by the Tribunal and the Supreme Court. Regarding the disallowance of Modvat credit on chemicals used in the paint shop and labels affixed on motor vehicles, the Chartered Accountant argued that these items qualified as inputs under established legal precedents. The Tribunal agreed, citing previous decisions and holding that Modvat credit on these items should be allowed. Similarly, concerning the air conditioners installed in the motor vehicles, the Tribunal found that the Modvat credit should be permitted based on relevant legal judgments. However, a specific amount of Rs. 8,66,030/- was disputed by the appellants as being inaccurately disallowed. The Tribunal concurred with the Chartered Accountant that this amount warranted further examination and remanded the issue back to the adjudicating authority for a fresh review based on the evidence presented by the appellants. In conclusion, the Tribunal upheld the appellants' contentions regarding the Modvat credit on chemicals, labels, and air conditioners, directing that these credits should be allowed. The judgment disposed of the appeal by allowing the Modvat credit on the specified items while remanding the issue of the disputed amount for further review by the adjudicating authority.
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