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of <h1>Appeal allowed on Modvat credit claim for broken inputs in transit, stressing evidence examination for fair outcome.</h1> <h3>COMMISSIONER OF CENTRAL EXCISE, INDORE Versus SURYA ROSHNI LTD.</h3> The appeal was allowed by way of remand, emphasizing the need for a proper assessment of whether Modvat credit could be claimed on inputs broken during ... Modvat/Cenvat - Modvat on inputs Issues:Appeal against modification of Modvat credit disallowance on broken shells, defective cold glasses, and BOPP films.Analysis:1. The appeal was filed by the Revenue against the modification of the order-in-original disallowing Modvat credit on broken shells, defective cold glasses, and BOPP films. The respondents, engaged in manufacturing, availed Modvat credit on specified inputs under Rule 57A but were found to have taken credit on inputs broken during transportation. The Deputy Commercial Manager admitted this, leading to a show cause notice. The Additional Commissioner confirmed duty demand, imposed a penalty, and directed interest payment. The Commissioner (Appeals) modified this by allowing Modvat credit and setting aside the penalty under Section 11AC.2. During the hearing, none appeared for the respondents, and no adjournment request was received. The learned JDR represented the Revenue. The impugned order of the Commissioner (Appeals) was criticized for not properly considering the issue. The Addl. Commissioner disallowed Modvat credit based on the admission of broken inputs during transit. The Commissioner (Appeals) wrongly assumed that since breakage occurred in the factory during manufacturing, Modvat credit was justified. However, Rule 57D was not applicable as breakage happened during transit. The Commissioner (Appeals) failed to analyze the evidence considered by the Addl. Commissioner, leading to an unsustainable decision. The matter was remanded back to the Commissioner (Appeals) for a fresh decision after hearing both sides.3. The appeal was allowed by way of remand, emphasizing the need for a proper assessment of whether Modvat credit could be claimed on inputs broken during transit. The decision highlighted the importance of a thorough examination of evidence and legal provisions to ensure a fair and just outcome in such cases.
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