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of <h1>Appellate Tribunal rules on Modvat credit: Tray Castings appeal allowed, Electrical Motor appeal rejected</h1> The Appellate Tribunal allowed the Revenue's appeal regarding the denial of Modvat credit on Tray Castings under Rule 57Q, overturning the lower Appellate ... Modvat - Capital goods Issues:1. Modvat credit on Tray Castings under Rule 57Q.2. Modvat credit on Electrical Motor and Electrical Control Panel under Rule 57Q.Issue 1: Modvat credit on Tray Castings under Rule 57Q:The Revenue appealed against the Commissioner (Appeals) Chandigarh's order allowing Modvat credit on Tray Castings under tariff heading 7325.20. The original authority had denied the credit, stating that goods falling under chapter 73 were not eligible. However, the Commissioner (Appeals) found Tray Castings essential for handling material during the manufacturing process, citing a Tribunal decision. The Tribunal held that the Trays were part of an Industrial Furnace, thus allowing the Modvat credit. The Appellate Tribunal noted that while the Tray Castings were integral to the manufacturing process, the specific exclusion of chapter 73 items for Modvat credit meant the credit could not be allowed based on integration alone.Issue 2: Modvat credit on Electrical Motor and Electrical Control Panel under Rule 57Q:In another case, the Modvat credit on Electrical Motor and Electrical Control Panel was denied to the respondent. The Commissioner (Appeals) relied on a previous decision and allowed the credit, considering these items as capital goods eligible for Modvat credit. The Appellate Tribunal concurred with this decision, noting that these items fell under the definition of capital goods as per a Larger Bench decision. Consequently, the Tribunal upheld the Commissioner (Appeals) order, allowing the Modvat credit on Electrical Motor and Electrical Control Panel as capital goods.In conclusion, the Appellate Tribunal allowed the Revenue's appeal regarding the Trays casting, overturning the lower Appellate Authority's decision. However, the appeal concerning the Electrical Motor and Electrical Control Panels was rejected, affirming the lower Appellate Authority's order allowing the Modvat credit on these items as capital goods.
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