Manufacturers can claim modvat credit for capital goods without ownership. Tribunal decision supports credit eligibility.

The Tribunal dismissed the Revenue's appeal, affirming that the respondents are entitled to claim modvat credit on dies received on loan basis, as ownership is not a prerequisite for claiming credit on duty paid on capital goods. The Tribunal relied on previous decisions establishing that manufacturers can claim credit for capital goods regardless of ownership. The respondents were deemed eligible for the credit as they utilized the dies in manufacturing goods.

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Issues:
Whether the respondents are entitled to take modvat credit on dies received on loan basis from another company.

Analysis:
The appeal was filed by the Revenue against the order passed by the Commissioner(Appeals) where it was held that the respondents can claim modvat credit on dies received on loan basis from M/s. Bajaj Auto Ltd. The Commissioner relied on a previous Tribunal order stating that ownership is not a requirement for claiming credit on duty paid on capital goods. The Revenue contended that since the respondents received the capital goods on loan basis, they are not entitled to take credit for the moulds and dies.

The Tribunal examined previous decisions such as German Remedies Ltd. vs. CCE, Goa; HIS Automotives Ltd. vs CCE, Chennai; and Sharda Motors Industries Ltd. vs. CCE, Chennai, where it was held that credit for capital goods cannot be denied to the manufacturer based on ownership. Citing these decisions, the Tribunal found no issue with the Commissioner's order and upheld the entitlement of the respondents to claim modvat credit on the dies received on loan basis.

Ultimately, the Tribunal dismissed the appeal, affirming the decision that the respondents are entitled to take modvat credit on the dies received on loan basis as they manufactured goods using those dies. The judgment was pronounced in court, bringing the case to a conclusion.

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