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of <h1>Appellants win appeal for Modvat credit on GP sheets used in OE part manufacturing</h1> <h3>GREWAL INDUSTRIES Versus COMMISSIONER OF CENTRAL EXCISE, CHANDIGARH</h3> The appellants successfully appealed the denial of Modvat credit on GP sheets used for manufacturing OE parts. It was established that the appellants ... Cenvat/Modvat - Inputs, use of, proof - Demand - Limitation Issues:Denial of Modvat credit on GP sheets for the manufacture of OE parts.Analysis:The appeal concerns the denial of Modvat credit on GP sheets used by the appellants for the manufacture of OE parts. The Revenue alleged that the appellants did not use these sheets for manufacturing OE parts but instead sold them in the market. The appellants contended that they purchased GP sheets from registered dealers for use in manufacturing OE parts, alongside using HR/CR sheets procured from the open market for the same purpose.Upon review, it was found that the appellants indeed purchased GP sheets from registered dealers under duty paid invoices for manufacturing OE parts. The Revenue's claim that GP sheets were not used for manufacturing OE parts lacked substantial evidence. Allegations were made based on opinions from OE parts manufacturers stating that GP sheets were not typically used, but these opinions were deemed inconclusive without mechanical tests on the parts supplied by the appellants.Furthermore, the invoices for the GP sheets were submitted to the department for defacement during the disputed period, indicating the appellants' transparency in availing credit. The absence of evidence showing visits to the factory premises to verify the use of GP sheets, coupled with the time-barred nature of the demand, supported the appellants' case. Previous Tribunal decisions allowing Modvat credit in similar cases further strengthened the appellants' position.Conclusively, the impugned order was set aside, and the appellants' appeal was allowed with consequential relief as per the law. The judgment highlighted the necessity of tangible evidence to support allegations and the importance of procedural adherence in tax credit disputes.
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