Modvat credit on returned goods for re-processing was upheld where earlier Tribunal rulings covered the same facts.

Modvat credit was considered admissible on goods returned to the assessee's own unit for re-processing when the goods were received back as sub-standard. The appellate authority had rejected the claim on the footing that the assessee had to proceed only under Rules 173-H and 173-L and that credit was not available under Rule 57-A. The Tribunal followed earlier decisions on returned goods and held that those facts were covered by the same principle. The denial of Modvat credit was therefore not sustainable, and the assessee's claim was accepted.

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Issues: Whether Modvat credit was admissible on goods returned for re-processing, or whether the assessee was required to resort only to the procedure under Rules 173-H/173-L.

Analysis: The dispute concerned credit taken on goods initially sent to the assessee's own unit and later returned as sub-standard. The appellate authority had denied credit by holding that the only available course was under Rules 173-H/173-L and that the credit was not admissible under Rule 57-A. On appeal, the Tribunal found that the facts were fully covered by earlier Tribunal decisions holding Modvat credit admissible on returned goods in similar circumstances.

Conclusion: The denial of Modvat credit was not sustainable and the assessee's claim was accepted.

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