Modvat credit for generator set denied where receipt evidence showed installation before eligibility date.

Modvat credit for a 50 KVA generator set depended on whether the set was received and installed after 23-7-1996, when such capital goods became eligible. The record showed receipt in the factory on 29-6-1996, supported by the assessee's own statement before revenue authorities and the handling bill. On that factual basis, the claim of post-23-7-1996 installation was rejected, and the set was treated as ineligible for Modvat credit as capital goods for the relevant period. The denial of credit, along with penalty and interest, was upheld against the assessee.

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Issues: Whether the D.G. set was installed after 23-7-1996 so as to qualify for Modvat credit as capital goods.

Analysis: The entitlement to Modvat credit turned on the date on which the generator set was received and installed. The record showed that the set was received in the factory on 29-6-1996, and the party had admitted this fact in its statement before the revenue authorities. The handling bill also supported receipt of the set on that date. Since generator sets of 50 KVA were not eligible for Modvat credit as capital goods before 23-7-1996, the claimed post-23-7-1996 installation was not accepted.

Conclusion: The issue is decided against the assessee and in favour of the Revenue; the denial of Modvat credit, penalty, and interest was upheld.

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