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of <h1>Commissioner allows Modvat credit on certain items, disallows on others based on CETA Rule 57Q</h1> <h3>COMMISSIONER OF C. EX., CHANDIGARH Versus KUDOS CHEMIE LTD.</h3> The Commissioner (Appeals) allowed Modvat credit on cylindrical vertical tanks and flanged manhole covers but disallowed it on Rotary Piston Oil Sealed ... Cenvat/Modvat - Capital goods Issues: Availability of Modvat credit on specific itemsIn this appeal, the issue revolves around the availability of Modvat credit to the respondents on two categories of items: (i) Cylindrical Vertical Tanks and Flanged Manhole Covers used for input storage, and (ii) Rotary Piston Oil Sealed High Vacuum Pump Accel Refrigeration Compressors. The dispute arose from the adjudicating authority disallowing the Modvat credit on these goods, citing that they were not covered as capital goods under Rule 57Q. The Commissioner (Appeals) overturned the original decision and permitted the credit on all items in question.Regarding the first category of items, the cylindrical vertical tanks and flanged manhole covers used for input storage, the learned Commissioner (Appeals) supported the availability of Modvat credit to the respondents. This decision aligns with the legal precedent established in the case of C.C.E., Raipur v. Raja Ram Maize Products, where the Tribunal had allowed Modvat credit on similar items under Rule 57Q. No contradictory legal basis was presented to challenge this ruling.However, concerning the second category of items, specifically the Rotary Piston Oil Sealed High Vacuum Pump Accel Refrigeration Compressors, the Commissioner (Appeals) allowing the Modvat credit on these goods was deemed unsustainable. These items fall under Heading 84.14 of the CETA, which explicitly excludes them from the definition of capital goods under Rule 57Q and its accompanying table. Consequently, the respondents are not entitled to claim Modvat credit on these particular items.In conclusion, the impugned order of the Commissioner (Appeals) has been modified to reflect the decisions outlined above. The appeal of the Revenue has been resolved accordingly, with the Modvat credit availability determined based on the specific categorization and legal provisions applicable to the items in question.
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