CESTAT Upholds Duty Demand for Canteen Fuel Use, Rejects Input Credit

The Appellate Tribunal CESTAT, Mumbai upheld a duty demand of Rs. 951 against the appellants for using fuel in the canteen, not considered an allowable input credit. The Tribunal affirmed that Modvat credit is only admissible when used in or in relation to the manufacture of the final product. The penalty of Rs. 1,000 imposed was overturned.

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The Appellate Tribunal CESTAT, Mumbai confirmed a duty demand of Rs. 951 against the appellants for using fuel in the canteen for cleaning utensils, which was not considered as an allowable input credit. The Tribunal upheld the Commissioner's decision that Modvat credit is only admissible when used in or in relation to the manufacture of the final product. The penalty of Rs. 1,000 imposed was set aside.

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