TaxTMI Login
🎉 Festive Offer: Flat 15% off on all plans! →⚡ Don’t Miss Out: Limited-Time Offer →
TaxTMI 
Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
When case Id is present, search is done only for this
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Manufacturers win exemption for electrical parts in pump motors under Notification No. 64/86</h1> <h3>SHROFFS ENGINEERING LTD. Versus COMMISSIONER OF CENTRAL EXCISE, MUMBAI-II</h3> The appellants, engaged in manufacturing submersible pumps, successfully argued for the exemption of electrical stampings and laminations used in motors ... Central Excise – Cenvat/Modvat credit – Refund claimed by the manufacturer of input cannot be denied on ground that credit does not stand reversed by the manufacturer – Adjustment of credit Issues:1. Availability of exemption under Notification No. 64/86 for stampings and laminations used in the manufacture of submersible pumps.2. Rejection of refund claim by authorities based on Modvat credit not being reversed by the manufacturer.3. Interpretation of Rule 57E for adjustment of credit and granting of refund.Analysis:1. The appellants, engaged in manufacturing submersible pumps, used electrical stampings and laminations from M/s. GKW under Notification No. 64/86. The department disputed the exemption, claiming the items were used in motors, not power-driven pumps, leading to show cause notices and cancellation of CT-2 certificates. Eventually, the Assistant Commissioner ruled in favor of the appellants, stating the goods were eligible for exemption as they were used in motors for power-driven pumps.2. Following the resolution of the dispute, the appellants sought a refund of duty paid on the goods. However, the refund was denied by lower authorities, citing potential loss to the department if Modvat credit was not reversed by the manufacturer. The Commissioner (Appeals) highlighted that granting the refund might lead to the stampings and laminations being treated as exempted products, affecting Modvat credit availed by the manufacturer.3. The Tribunal held that the refund claim could not be rejected based on the manufacturer not reversing Modvat credit. The refund was deemed admissible, emphasizing that the reversal of credit could follow the grant of refund. Refund precedes credit adjustment, as per Rule 57E, which allows for the adjustment of credit subsequent to the refund of duty paid on inputs. The authorities were permitted to pursue the manufacturer for credit reversal post-refund grant to the appellants, ensuring a fair resolution of the issue.
TaxTMI 
