Modvat credit treatment clarified: utilised credit on capital goods need not be reversed on conversion; unutilised credit lapses. If a DTA unit converted to an EOU/EHTP/STP has already availed Modvat credit on plant, machinery and equipment and utilised that credit for payment of duty on goods manufactured and cleared before conversion, the utilised credit need not be reversed on conversion. Any Modvat credit balance unutilised at the date of conversion lapses and cannot be used after conversion.
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Provisions expressly mentioned in the judgment/order text.
Modvat credit treatment clarified: utilised credit on capital goods need not be reversed on conversion; unutilised credit lapses.
If a DTA unit converted to an EOU/EHTP/STP has already availed Modvat credit on plant, machinery and equipment and utilised that credit for payment of duty on goods manufactured and cleared before conversion, the utilised credit need not be reversed on conversion. Any Modvat credit balance unutilised at the date of conversion lapses and cannot be used after conversion.
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