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<h1>Manufacturer's credit denial overturned under Rule 57Q for duty paid on goods, crucial interpretation clarified.</h1> The case dealt with the denial of credit under Rule 57Q on duty paid by the manufacturer for goods classified under Heading 84.18. The Commissioner ... Cenvat/Modvat - Capital goods Issues:1. Denial of credit under Rule 57Q on duty paid by manufacturer.2. Classification of goods under Heading 84.18 as capital goods.3. Interpretation of Rule 57Q regarding the date for determining admissibility of credit.Analysis:1. The judgment deals with the denial of credit under Rule 57Q on duty paid by the manufacturer. The assessee had taken credit on duty paid by the manufacturer on vapour absorption heat pump. The issue arose when the goods were classified under Heading 84.18, which was excluded from consideration as capital goods under the explanation below 57Q(1). The Asstt. Commissioner initially denied the credit on this ground, leading to an appeal by the Commissioner (Appeals) who allowed the credit based on the goods being included in the definition of capital goods and being used in the manufacture of the finished product.2. The interpretation of Rule 57Q regarding the classification of goods under Heading 84.18 as capital goods was crucial in this case. Rule 57Q, as it stood when the credit was taken, defined capital goods in the explanation below sub-rule (1). The definition specified that goods falling under Heading Chapter 84, except those specifically excluded, were considered capital goods. However, goods falling under 84.18 were among those excluded from being classified as capital goods at the time the credit was taken.3. The judgment clarified the importance of the date for determining the admissibility of credit under Rule 57Q. The Counsel for the respondent argued that the goods were capital goods when the duty was paid, based on a different wording of the definition at that time. However, Rule 57Q(1) emphasized that the relevant date for deciding the admissibility of credit was when the credit was taken, not when the goods were cleared by the manufacturer. Therefore, the date of taking credit by the manufacturer was crucial in determining the eligibility for credit, leading to the appeal being allowed and the order of the Commissioner (Appeals) being set aside, with the order of the Asstt. Commissioner being restored regarding these goods.
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