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<h1>Tribunal remands case on Modvat credit for machinery parts due to lack of evidence</h1> The Tribunal found the lower authority's order allowing Modvat credit for machinery parts improper due to insufficient evidence on the nature of the ... Modvat credit - Deemed credit Issues:Allowance of Modvat credit for old and worn out machine parts.Analysis:The appeal challenged the order of the Collector of Central Excise (Appeals) upholding the allowance of deemed Modvat credit for re-rollable old and worn out machine parts. The learned SDR contended that old machine parts are not re-rollable and Modvat credit is only for specific materials like Ingots. The Department argued that the old machine parts have lost their identity as iron and steel products. The respondent's consultant argued that the burden to prove non-duty paid inputs lies with the Department and cited precedents supporting this view.The main issue was whether Modvat credit could be allowed for used and worn out machinery parts brought in for re-rolling. The Tribunal observed that the appeal focused on Modvat credit for machinery parts, but the nature of these parts was not adequately addressed by any party. The appellants claimed the parts were re-rollable without providing evidence. The Tribunal held that the lower authority's order was improper due to lack of factual analysis on the nature of the machinery parts. The Tribunal also discussed the Modvat Scheme's specifics, emphasizing that credit is related to duty on specified inputs used in specific finished products. Deemed Modvat credit was fixed for iron and steel items, not machinery items, unless proven to be iron and steel structures suitable for re-rolling. As the machinery parts' details were not provided, the Tribunal remanded the matter for reconsideration.In conclusion, the Tribunal found the lower authority's order allowing Modvat credit for machinery parts improper due to insufficient evidence on the nature of the parts. The case was remanded for further consideration based on the observations made.
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