Modvat credit on capital goods denied where goods were received by a separate manufacturing unit treated as distinct from the claimant unit.

Modvat credit on capital goods was not available to one manufacturing unit where the goods were received in the name of a separate unit. The two units, though owned by the same company and located adjacent to each other, were treated as distinct manufacturing units, and the capital goods were obtained by the other unit for manufacture of a different excisable product. Credit could not be transferred or claimed by one unit for goods received and used by another unit, and the denial of Modvat credit was upheld.

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Issues: Whether Modvat Credit on capital goods could be claimed by one manufacturing unit when the goods were received in the name of a separate unit.

Analysis: The capital goods were obtained by a different manufacturing unit engaged in manufacture of a different excisable product. The appellant unit and the other unit, though owned by the same company and adjacent to each other, were distinct units. Credit could not be availed by one unit in respect of goods received by another unit.

Conclusion: The denial of Modvat Credit was upheld and the appeal failed.

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