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of <h1>Tribunal grants modvat credit for DC motor and Thyristor, emphasizing direct nexus with slitter machines</h1> The Tribunal ruled in favor of the appellant, granting eligibility for modvat credit for the DC motor and Thyristor fitted on machines at the time of ... Modvat scheme Issues:- Eligibility of modvat credit for DC motor and Thyristor fitted on machines at the time of clearance.Analysis:The appeal questioned the denial of modvat credit for a DC motor and Thyristor fitted on machines at the time of clearance. The lower authority argued that these items were not essential for the final product, a slitter rewinder, as some machines were sold without them. The appellant contended that the items were crucial for machine operation and had a direct nexus to the manufacturing process. The appellant referred to the location of these items in the machine diagram, highlighting their role in machine functioning. The Tribunal noted that the machines became operational with the fitment of these items and emphasized the direct nexus between the items and the slitter machines' functions. Citing a Supreme Court case, the Tribunal stressed the need for a liberal interpretation of the modvat scheme when a nexus between inputs and the final product is evident. Consequently, the Tribunal set aside the lower authority's order and allowed the appeal, including the penalty order.In conclusion, the Tribunal ruled in favor of the appellant, granting eligibility for modvat credit for the DC motor and Thyristor fitted on machines at the time of clearance. The decision was based on the direct nexus between these items and the functioning of the slitter machines, emphasizing the liberal interpretation of the modvat scheme when a clear connection exists between inputs and the final product. The Tribunal's decision overturned the lower authority's denial of modvat credit, highlighting the importance of considering the condition in which goods are cleared from the factory and the operational necessity of the fitted items for the machines.
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