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of <h1>Tribunal allows appeal on Modvat credit for axle box casting, stresses compliance</h1> The Tribunal ruled in favor of the appellant, allowing the appeal regarding the admissibility of Modvat credit for axle box casting received after ... Modvat - Inputs Issues:Admissibility of Modvat credit for axle box casting received after processing by job workers.Analysis:The appeal concerned the admissibility of Modvat credit for axle box casting received after undergoing processing by job workers. The appellant argued that the axle box castings were only processed castings, not intermediate products, and therefore, Rule 57J did not apply. They had obtained permission under Rule 57F(2) for the job work, which was acknowledged by Central Excise officers. The Department alleged a breach of Rule 57J, but the appellant contended that they had complied with the substantial provisions of the law and were entitled to Modvat credit. The appellant cited the case of Lupin Laboratories v. CCE, Indore in support of their argument.The Department reiterated its stance that permission under Rule 57J should have been obtained since the goods underwent transformation. However, the Tribunal noted that the only machining was done at the job workers' premises, and the casting essentially remained unchanged. Therefore, Rule 57F, which pertains to processing, was deemed more relevant in this case. The Assistant Collector's observation that the appellant had not followed Rule 57F(2) procedure was found to be flawed since the gate passes were in the name of the job workers but clearly mentioned the appellant's name as the account holder. The Tribunal emphasized that substantial compliance with the law was crucial, and the benefit of Modvat credit should not be denied due to procedural irregularities if there was substantial compliance.Ultimately, the Tribunal set aside the impugned order and allowed the appeal, ruling in favor of the appellant regarding the admissibility of Modvat credit for the axle box casting received after processing by job workers.
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