2013 (12) TMI 1551 - AT - Central Excise

Tribunal Upholds Modvat Credit for Grey Fabrics as Inputs, Rejects Revenue's Challenge

Commissioner of Central Excise, Jaipur Versus M/s. Nahata Fabrics Ltd., M/s. Nahata Investment Pvt. Ltd., M/s. Nahata Fabrics Ltd., M/s. Ummed Textiled Mills., M/s. Kalawati Fabrics, M/s. Vinod Industries, M/s. Happy Steel Pvt. Ltd.

The Tribunal upheld the decision allowing Modvat credit for grey fabrics as specified inputs for processors of cotton fabrics, rejecting the Revenue's ... - Issues involved: Dispute over Modvat credit eligibility for processors of cotton fabrics regarding grey fabrics as specified inputs.Summary:Issue 1: Modvat credit eligibility for grey fabricsThe Revenue challenged the allowance of Modvat credit to processors of cotton fabrics for grey fabrics, arguing that grey fabrics were not specified inputs despite yarn, dye, and chemicals being specified. The original adjudicating authority dropped proceedings against the respondents, a decision upheld by the Commissioner (Appeals) citing relevant circulars and precedents. The Revenue, unsatisfied, appealed to the Tribunal.Issue 2: Precedents and settled lawThe Tribunal, led by Ms. Archana Wadhwa, noted that the issue had been settled by previous decisions, including those of the Tribunal and the High Court of Delhi. Citing cases such as CCE vs. Suzuki Synthetics, Delite Processors vs. CCE, and Damini Printers vs. CCE, the Tribunal found no reason to deviate from the established legal position. Consequently, all appeals filed by the Revenue were rejected.This judgment clarifies the Modvat credit eligibility for processors of cotton fabrics concerning grey fabrics and reaffirms the importance of adhering to settled legal precedents in tax matters.