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of <h1>Tribunal Grants Modvat Credit for Glycerine and Soap Inputs, Reversing Denied Claims</h1> <h3>OSWAL AGRO MILLS LTD. Versus COLLECTOR OF CENTRAL EXCISE, CHANDIGARH</h3> OSWAL AGRO MILLS LTD. Versus COLLECTOR OF CENTRAL EXCISE, CHANDIGARH - 1998 (101) E.L.T. 293 (Tribunal) Issues:- Modvat credit denial on certain inputs- Modvat credit on Caustic Soda Lye- Modvat credit rejection on specific elementsModvat Credit Denial on Certain Inputs:The appellant, engaged in soap manufacturing with glycerine as a by-product, sought Modvat credit for Hydro Chloric Acid, Ferric Alum, and Activated Carbon. The denial was based on glycerine not being declared as a final product. However, the Tribunal referred to a previous decision in the appellant's case, allowing Modvat credit for inputs used in glycerine manufacture. Following this precedent, the appellant was granted Modvat credit on the duty paid for the mentioned inputs concerning glycerine production.Modvat Credit on Caustic Soda Lye:In the soap manufacturing process, Caustic Soda Lye is used, leading to the generation of fatty acid used in further soap production. The appellant was denied Modvat credit on Caustic Soda Lye due to soap stock exemption. Referring to Central Excise Rules and a previous ruling in the appellant's case, the Tribunal found Caustic Soda Lye to be an eligible input for soap production. Consequently, the appellant was granted Modvat credit for the duty paid on Caustic Soda Lye.Modvat Credit Rejection on Specific Elements:The lower authorities rejected Modvat credit on elements like Dimethyl Hydroquinone, Dibutyl para cresol, Musk 1012, Linalool, and Sodium Sulphate. However, the Tribunal found no serious defect in the declarations as the inputs declared matched those used in the manufacturing process. Notably, the department did not contest the actual usage of these inputs. Consequently, the denial of Modvat credit for these elements was deemed unjustified, and the impugned orders were set aside in favor of the assessee, allowing the appeals.In conclusion, the Tribunal granted Modvat credit to the appellant for the specified inputs used in glycerine production and soap manufacturing, overturning the denials based on previous rulings and the matching of declared inputs with those actually utilized.
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