Appellate Tribunal rules interest not imposed on unutilized Modvat credit. Fuel oil, foodstuff not eligible.

The Appellate Tribunal CESTAT, Mumbai ruled in favor of the applicants, stating that interest cannot be imposed on unutilized Modvat credit. It was ordered that the interest be reversed, with a clarification that fuel oil and foodstuff on board ship are not eligible for Modvat credit, and the applicants are not obligated to pay interest on the unutilized credit.

---

---

The Appellate Tribunal CESTAT, Mumbai allowed the application stating that interest cannot be levied on Modvat credit lying unutilized and ordered to be reversed. Fuel oil and food stuff on board ship are not eligible for Modvat credit. The applicants are not liable to pay interest on unutilized credit.

---