1997 (1) TMI 185

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..... lati, Vice President]. This reference application arises out of the order of the Tribunal bearing No. 525/96, dated 16-4-1996. The Tribunal has upheld the order of the learned lower authority denying the appellants the benefit of Modvat credit under Rule 57H in respect of the inputs which were not available for verification. 2. The learned Counsel referred us to the questions of law as for .....

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..... should be available until verification is conducted by the deptt. and shall not be used and further whether such restriction regarding use of the inputs is contemplated under Rule 57H. At the outset, he has urged that Rule 57H as such does not contemplate verification of the goods that may be lying in stock or otherwise and all it speaks about is that the credit can be allowed subject to the sa .....

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..... redit can be taken based on the documents prescribed under Rule 57G. In the present case, the credit was taken only after filing of the declaration under Rule 57G on being pointed out by the Bench, he fairly conceded that this plea was not taken before the Tribunal. He however urged that this fact will be borne out by the records and the appellant cannot therefore be non-suited for the absence of .....

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..... er of the Tribunal. This plea of the appellants therefore has to be rejected. 5. In regard to the scope of Rule 57H, we observe that the appellants plea is that the rule provides for verification and not physical verification of the goods as such. We observe that Rule 57H has been carved out as an exception from the main provisions of the Modvat rules to facilitate taking of the Modvat credit wh .....

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..... h may be lying in stock or which may be in process. Therefore, to say that physical verification is not contemplated would not be correct. The authorities below felt that verification with reference to the physical stock was necessary for forming a satisfaction for the eligibility of the appellants to the Modvat credit. This satisfaction we observe is based on a rational criteria. The authorities .....

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