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2014 (2) TMI 277 - AT - Central ExciseDenial of Modvat credit - Denial relates to a diesel engine which was a bought out item requiring affixture thereof to the alternator for removal of the total D.G. Set which is composed of alternator as well as diesel engine - Revenue held that the diesel engine not being used for manufacture, Modvat credit to above extent is not permissible - Held that:- If on the inputs the assessee had already paid the taxes on the basis that when the goods are utilised in the manufacture of further products as inputs thereto then the tax on these goods gets adjusted which are finished subsequently. Thus a right accrued to the assessee on the date when they paid the tax on the raw materials or the inputs and that right would continue until the facility available thereto gets worked out or until those goods existed. Therefore, it becomes clear that Section 37 of the Act does not enable the authorities concerned to make a rule which is impugned herein and, therefore, we may have no hesitation to hold that the rule cannot be applied to the goods manufactured prior to 16-3-1995 on which duty had been paid and credit facility thereto has been availed of for the purpose of manufacture of further goods - appellant shall cooperate with the ld. adjudicating authority for verification of evidence relating to the claim of credit - Upon verification of the entry, the appellant shall be allowed the benefit of Modvat credit - Decided in favour of assessee.
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