Modvat credit on imported capital goods requires fresh examination of receipt, installation, and the relevant circular.

Modvat credit eligibility on imported capital goods under Project Import regulations turned on whether the relevant date was receipt of the goods or installation, and on the effect of the amendment to Rule 57Q. The record also showed that the circular relied upon by the assessee had not been placed before or considered by the Commissioner, so the factual and legal basis of the claim had not been fully examined. The matter was therefore remanded to the jurisdictional Commissioner for fresh decision in accordance with law after hearing the appellant.

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Issues: Whether Modvat credit on imported capital goods under Project Import regulations was to be allowed with reference to the date of receipt of the goods or the date of installation, and whether the relevant circular affected the claim.

Analysis: The dispute concerned the timing of eligibility for credit on capital goods received before the relevant amendment to Rule 57Q. The record showed that the circular relied upon by the assessee had not been placed before or considered by the Commissioner. In view of this omission, the matter required fresh examination on the factual and legal questions bearing on eligibility.

Outcome: The matter was remanded to the jurisdictional Commissioner for fresh decision in accordance with law after giving the appellant an opportunity of hearing.

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