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Issues: Whether, upon deposit of the duty amount pursuant to the interim order, corresponding Modvat credit in the capital goods account was to be restored and permitted to be utilised for payment of duty on acetic acid.
Analysis: The dispute concerned capital goods received for manufacture of acetic acid, on which Modvat credit had been taken and utilised against duty on other products. The earlier prima facie view under Rule 57S of the Central Excise Rules, as amended, had recognised utilisation of credit for duty on excisable goods. The Tribunal also noted the need to maintain consistency with an earlier interim order of the same Bench and relied on the final decision of the Bench and the East Regional Bench to support restoration of the credit. It was accepted that, once the duty amount was deposited, the corresponding credit should not be extinguished but should remain available in the capital goods account.
Conclusion: The applicants were held entitled, on depositing the entire duty amount, to restoration of corresponding Modvat credit in their capital goods account for utilisation towards duty on acetic acid.
Final Conclusion: The application was allowed to the extent of directing restoration of the equivalent Modvat credit after deposit of the duty amount, leaving the substantive appeals for final hearing.
Ratio Decidendi: Where capital goods credit is otherwise admissible and the duty amount is deposited, the corresponding Modvat credit is to be restored in the capital goods account and may be utilised for duty on the intended excisable product, subject to the applicable rule framework.
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