Modvat credit on duty-paid inputs upheld as settled law under assessable value computation principles.

Modvat credit was available on duty paid inputs used in clearing the final product because the assessable value computation and exclusion of duty components under Section 4 had already been settled by a Larger Bench and subsequent decisions. The Tribunal treated the issue as no longer res integra and held that the Commissioner's allowance of credit accorded with the Modvat scheme and the prevailing legal position. The Revenue's challenge therefore lacked merit and failed.

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Issues: Whether the assessee was entitled to Modvat credit on duty paid on inputs while clearing the final product, and whether the Revenue's challenge to the allowance of such credit had merit.

Analysis: The dispute turned on the computation of assessable value and the entitlement to exclusion of duty components under Section 4. The Tribunal noted that the point had already been considered by a Larger Bench and by several subsequent decisions, which had settled the controversy in favour of the assessee. Since the duty on inputs had been paid and the issue was no longer res integra, the Commissioner's allowance of Modvat credit was held to be consistent with the Modvat scheme and the governing legal position.

Conclusion: The assessee was entitled to Modvat credit and the Revenue appeal failed.

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