Tribunal acknowledges error, allows appeals, and recalls Final Orders denying Modvat credit on capital goods.

The Appellate Tribunal CESTAT, Chennai, acknowledged an error in Final Order Nos. 1273 & 1274/2007, where Modvat credit on capital goods used at off-factory limestone mines was denied. The Tribunal recognized the mistake of not considering the Apex Court's judgment in the second Vikram Cement case, leading to the recall of the Final Orders. The appeals were allowed, and the cases were set to be disposed of separately, demonstrating the Tribunal's commitment to rectifying errors and upholding legal precedents for fair treatment of the appellants.

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Issues: Mistake apparent from the record in Final Orders denying Modvat credit on capital goods used at off-factory limestone mines; Non-consideration of the Apex Court's judgment in the second Vikram Cement case by the Tribunal.

In this case before the Appellate Tribunal CESTAT, Chennai, the appellants highlighted a mistake in Final Order Nos. 1273 & 1274/2007, where Modvat credit on capital goods used at off-factory limestone mines was denied. The denial was based on the grounds that the capital goods were used outside the factory of production of the final product, cement, citing previous Apex Court judgments. However, the appellants argued that the second Vikram Cement case held that Modvat credit on capital goods used in captive mines by a cement manufacturer would be admissible, provided the capital goods were used in mines catering only to the limestone requirement of the assessee. The appellants contended that the capital goods in question were used only in captive mines, thus entitling them to avail Modvat credit. They also pointed out the non-consideration of the Apex Court's judgment by the Tribunal at the time of final disposal of the appeals, which they argued was an apparent error requiring rectification.

The Tribunal, after hearing both sides, acknowledged the error in Final Order Nos. 1273 & 1274/2007 due to the non-consideration of the Apex Court's judgment in the second Vikram Cement case. Referring to the Larger Bench decision in Hindustan Lever case, the Tribunal held that the error was apparent from the record and accordingly recalled the Final Orders. The applications by the appellants were allowed to that extent, and the appeals were set to be disposed of by separate order. This decision reflects the Tribunal's adherence to legal precedents and the correction of errors in the application of law to ensure fair treatment and justice for the appellants.

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