Modvat credit disputes should not be kept in the call book merely because of an audit objection.

An appeal should not be kept pending or remanded merely because of an audit objection where the merits are already settled in favour of the assessee. The order notes that there was no dispute on entitlement to Modvat credit and that the only basis for remand was placement of the matter in the call book until the objection was resolved. It also relies on the Board's circular that, where binding instructions exist on an issue, no protective demand should be raised on the basis of a CERA objection contrary to those instructions. The remand was therefore unjustified.

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Issues: Whether the appeal could be kept pending and the adjudication set aside merely because of an audit objection, despite the issue on merits being settled in favour of the assessee.

Analysis: The only basis for remand was the existence of an audit objection and the view that the matter should remain in the call book until the objection was resolved. The order records that there was no dispute on merits regarding entitlement to Modvat credit. It further relies on the Board's subsequent circular stating that where Board circulars or instructions exist on a particular issue, no protective demand should be raised on the basis of a CERA objection if the objection is contrary to such instructions. In that situation, keeping the matter pending was contrary to the binding circular.

Conclusion: The remand was not justified and the assessee succeeded on this issue.

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