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of <h1>Appeal Denied: Storage Tanks Ineligible for Modvat Credit under Rule 57Q</h1> The appeal was dismissed as the storage tanks purchased by the Appellants for their biscuit manufacturing business were deemed ineligible for Modvat ... Modvat/Cenvat - Modvat on capital goods Issues:Interpretation of Rule 57Q for eligibility of Modvat credit on storage tanks in a factory.Analysis:The case involved the Appellants, engaged in biscuit manufacturing, who purchased storage tanks for sugar syrup and gas, claiming Modvat credit under Rule 57Q. The department disputed the eligibility of the tanks as capital goods under the rule. Both lower authorities upheld the department's stance, leading to the appeal.The Appellants argued that the tanks fell under the category of capital goods as per Rule 57Q, citing relevant legal precedents like the Supreme Court's decision in CCE v. Jawahar Mills Ltd. The Appellants also referenced Tribunal cases where storage tanks were deemed eligible for Modvat credit under Rule 57Q.On the other hand, the Department Representative contended that only goods explicitly mentioned in Rule 57Q during March 2000 were eligible for Modvat credit. Since storage tanks were not specified and were classified under Chapter 73, they were ineligible. The DR highlighted that a subsequent notification in 2001 did not apply retrospectively to benefit the Appellants for the period in question.Upon review, the Judge noted that during March 2000, storage tanks were not specified as eligible capital goods under Rule 57Q. The Judge emphasized that the determination of eligible capital goods for Modvat credit should align with the rule's explicit provisions. Referring to a precedent by the Tribunal's Larger Bench in CCE, Indore v. Surya Roshni Ltd., the Judge concluded that the storage tanks in question were not eligible for capital goods credit under Rule 57Q during the relevant period. Consequently, the appeal was dismissed, upholding the lower authorities' decision to disallow the Modvat credit on the storage tanks.
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