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of <h1>Appellate Tribunal rules in favor of Modvat credit for POY used in manufacturing; deviations justified by business exigencies</h1> <h3>MANGALAM ENTERPRISES Versus COMMISSIONER OF C. EX. & CUS., VADODARA</h3> The Appellate Tribunal CEGAT, Mumbai allowed the appeals regarding the denial of Modvat credit for partially oriented yarn (POY) used in manufacturing ... Modvat/Cenvat Issues involved: Appellants' claim for Modvat credit in respect of partially oriented yarn (POY) and denial of credit based on storage of inputs outside the factory premises.Summary:The appeals were heard by the Appellate Tribunal CEGAT, Mumbai where the appellants sought adjournment, which was denied due to the appeals being of 1998 and the request being indefinite. The issue in both appeals revolved around the denial of Modvat credit for POY used in manufacturing draw to twisted yarn, as the consignments of inputs were stored outside the factory before use. The appellants argued that the storage was due to facility shortage and was in compliance with Modvat rules, supported by relevant case laws and circulars permitting such storage. There was no dispute regarding the receipt and utilization of inputs, and circulars allowed storage outside the factory premises. The Tribunal held that deviations due to business exigencies do not justify denial of credit, as recognized by circulars. Consequently, the impugned order was set aside, and the appeals were allowed, granting the appellants consequential relief if any.
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