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2013 (9) TMI 98 - SC - Central ExciseMODVAT / Cenvat Credit – Capital Goods - Manufacturer versus trader - Appeal against the decision of tribunal [2003 (5) TMI 166 - CEGAT, CHENNAI] - Revenue was of the view that the appellant had wrongly described such parts-equipments-cables etc. as ‘capital goods’ though the said goods were not covered under the definition of ‘capital goods’ under the provisions of Rule 57 Q of the Rules - It was also submitted that such goods were not used in the factory premises of the appellant in any manufacturing process and therefore, the said goods were not capital goods as claimed by the appellant. It was also the case of the department that the said goods had been exported by the appellant along with parts of machinery manufactured by the appellant in a container and the said parts i.e. the parts purchased by the appellant had been exported in the same condition i.e. even without opening the packages or testing them. Thus, the role of the appellant was merely like a trader who had purchased certain goods including parts of machinery, cables etc. from dealers in our country and thereafter exported the same in the exact condition in special containers along with the machinery manufactured by it. Held that:- The appellant had only acted as a trader or as an exporter in relation to the machinery purchased by it, which had been exported and used for setting up a sugar plant in a foreign country - In any case, it cannot be said to have manufactured that plant in its factory - the appellant-assessee did not pay any excise duty on the sugar plant set up by it in Vietnam and therefore there cannot be any question of availing any MODVAT credit – Relying upon Madras Cements Ltd. v. CCE [2010 (5) TMI 8 - SUPREME COURT ] - In order to avail of MODVAT/CENVAT credit, an assessee had to satisfy the assessing authorities that the capital goods in the form of components, spares and accessories had been utilized during the process of manufacture of the finished product. It was pertinent to note that the most important object concerning grant of the MODVAT credit was to see that cascading effect of the duty imposed on the final product cleared at the time of sale was removed - If some duty was levied on the inputs, raw materials etc. and if the final product was also dutiable, then the duty levied on inputs i.e. raw materials was to be reduced from the duty ascertained on the final product. No duty was paid by the appellant on the final product i.e. on the sugar plant which had been set up in Vietnam - there would not be any question with regard to getting credit on the duty paid on the inputs, especially when the appellant had not used the machinery manufactured by other manufacturers in its factory premises while manufacturing machinery which had been transported along with machinery manufactured by the appellant in a common container which had been sent to Vietnam by sea – Decided against Assessee.
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