TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
When case Id is present, search is done only for this
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>CEGAT Chennai: Modvat Credit Upheld for Intermediate Products</h1> <h3>SNOWCEM INDIA LTD. Versus COMMISSIONER OF C. EX., CHENNAI</h3> SNOWCEM INDIA LTD. Versus COMMISSIONER OF C. EX., CHENNAI - 2003 (160) E.L.T. 293 (Tri. - Chennai) Issues:- Interpretation of Rule 57C regarding Modvat credit availed on inputs used in the manufacture of paints and resins cleared to another location.- Applicability of Rule 57C to the situation where intermediate products are cleared to a different factory for further manufacturing of final products.- Comparison of various judicial precedents regarding Modvat credit on intermediate products and final products.Analysis:1. Interpretation of Rule 57C:The case involved a dispute regarding the application of Rule 57C concerning the Modvat credit availed on inputs used in the manufacture of paints and resins cleared to another factory. The Revenue contended that the Modvat credit should be reversed as per Rule 57C due to the clearance of resins to Bombay under an exemption Notification. The Commissioner (Appeals) held that the resins cleared under the exemption Notification fall under the purview of Rule 57C, requiring the reversal of Modvat credit. However, the appellants argued that Rule 57C should not apply as the final products were dutiable at both Madras and Bombay, and the resins were intermediate products used in the manufacturing process.2. Applicability of Rule 57C to Intermediate Products:The appellants contended that the resins cleared to Bombay were intermediate products and not final products exempted from duty. They emphasized that the final products, paints, were dutiable at both locations, Madras and Bombay, and therefore, Rule 57C should not be invoked to reverse the Modvat credit. Citing judicial precedents such as the case of Escorts Limited v. CCE, New Delhi, they argued that Modvat credit cannot be denied when inputs are transferred to other units under Chapter X Procedure for further manufacturing of dutiable final products.3. Judicial Precedents and Comparison:The appellants relied on various judicial decisions to support their argument, including the case of Dujodwala Resins Terpenes Ltd. v. CCE, Chandigarh, and CCE, New Delhi v. Hindustan Sanitarywares & Industries. These judgments established that Modvat credit is available on captively consumed inputs even if intermediate products are exempted from duty, as long as the final products are dutiable. The Tribunal found the ratio of these judgments applicable to the present case, emphasizing that Modvat credit cannot be denied when intermediate products are used in the manufacture of final products on which duty is discharged.In conclusion, the Appellate Tribunal, CEGAT, Chennai, set aside the Commissioner (Appeals)'s order and allowed all three appeals, ruling in favor of the appellants based on the interpretation of Rule 57C, the nature of the products involved, and the applicability of judicial precedents supporting the availability of Modvat credit in such scenarios.
TaxTMI 
TaxTMI 
