TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
Use comma for multiple locations.
---------------- For section wise search only -----------------
Accuracy Level ~ 90%
of 
Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
Join Channel
Note
Bookmark
Share
Don't have an account? Register Here
of Press 'Enter' after typing page number.
Issues: (i) Whether Modvat credit taken on damaged colour picture tubes was admissible and could not be reversed when the goods were damaged beyond repair in the course of manufacture. (ii) Whether the demand was barred by limitation in the absence of suppression or misstatement of facts.
Issue (i): Whether Modvat credit taken on damaged colour picture tubes was admissible and could not be reversed when the goods were damaged beyond repair in the course of manufacture.
Analysis: The damaged picture tubes were found in stock and were shown in the statutory returns. The department produced no evidence that the goods were usable in the manufacture of colour T.V. sets or had market value. On the materials available, the goods were treated as damaged in the course of manufacture and covered by the provision permitting destruction of damaged inputs with remission of duty. In those circumstances, the Modvat credit originally taken was held to be proper and not liable to reversal.
Conclusion: The issue was decided in favour of the assessee.
Issue (ii): Whether the demand was barred by limitation in the absence of suppression or misstatement of facts.
Analysis: The goods were recorded in stock and reflected in RT-12 returns, and no evidence established suppression or misstatement. The notice was issued beyond six months from the relevant credit and reversal entries, so the extended period could not be invoked. The demand was therefore time barred.
Conclusion: The issue was decided in favour of the assessee.
Final Conclusion: The demand was unsustainable both on merits and on limitation, and the assessee succeeded in full.
Ratio Decidendi: Modvat credit on inputs damaged beyond repair in the course of manufacture cannot be denied or reversed in the absence of evidence that the goods were usable or marketable, and the extended limitation period cannot be invoked without proof of suppression or misstatement of facts.
TaxTMI 
