Capital goods credit denial needs reasoned item-wise findings; unsupported assumptions and ignored precedents justified remand.

An adjudication denying capital goods credit must record item-wise, fact-based reasons and address the precedents relied on by the assessee; conclusions drawn on assumptions or expressions such as "do not appear" or "apparently" are insufficient. Where the authority fails to examine the evidence and applicable law, the denial of credit cannot be sustained. The matter was therefore set aside and remanded for fresh adjudication after granting the assessee an opportunity of hearing.

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Issues: Whether the order denying capital goods credit could be sustained when it did not deal with the cited case law, proceeded on assumptions rather than facts, and lacked reasoned findings, warranting remand for fresh adjudication.

Analysis: The impugned order did not specifically examine the authorities relied upon by the assessee and, in several instances, recorded conclusions on the basis of expressions such as "do not appear" or "apparently" without supporting factual findings. The denial of credit on several items was therefore not founded on a proper appraisal of the evidence or the legal position. In a matter concerning eligibility to capital goods credit, the adjudicating authority was required to give clear reasons item-wise, especially where the assessee had placed reliance on relevant precedents and had explained the use of the goods in manufacture.

Conclusion: The denial of credit could not be sustained on the present reasoning, and the matter was rightly set aside and remanded for fresh decision after granting the assessee an opportunity of hearing.

Ratio Decidendi: An adjudication denying fiscal credit must contain item-wise reasoned findings based on facts and applicable law, and an order founded on assumptions and without consideration of relevant precedents is liable to be set aside and remanded.

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