2011 (9) TMI 394 - AT - Central Excise

Modvat credit - Received the capital goods on loan basis - Held that - the issue is settled in the decisions of the Tribunal in the case of German Remedies Ltd. vs. CCE Goa - 2002 -TMI - 51256 - CEGAT WEST ZONAL BENCH MUMBAI ; the Tribunal held that the credit in respect of capital goods could not be denied to the manufacturer on the ground that the goods were not owned by them - Decided in favour of assessee,

Summary

Issues:
Whether the respondents are entitled to take modvat credit on dies received on loan basis from another company.

Analysis:
The appeal was filed by the Revenue against the order passed by the Commissioner(Appeals) where it was held that the respondents can claim modvat credit on dies received on loan basis from M/s. Bajaj Auto Ltd. The Commissioner relied on a previous Tribunal order stating that ownership is not a requirement for claiming credit on duty paid on capital goods. The Revenue contended that since the respondents received the capital goods on loan basis, they are not entitled to take credit for the moulds and dies.

The Tribunal examined previous decisions such as German Remedies Ltd. vs. CCE, Goa; HIS Automotives Ltd. vs CCE, Chennai; and Sharda Motors Industries Ltd. vs. CCE, Chennai, where it was held that credit for capital goods cannot be denied to the manufacturer based on ownership. Citing these decisions, the Tribunal found no issue with the Commissioner's order and upheld the entitlement of the respondents to claim modvat credit on the dies received on loan basis.

Ultimately, the Tribunal dismissed the appeal, affirming the decision that the respondents are entitled to take modvat credit on the dies received on loan basis as they manufactured goods using those dies. The judgment was pronounced in court, bringing the case to a conclusion.