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2017 (2) TMI 316 - AT - Central ExciseReversal of MODVAT credit on defective machinery - whether the defective parts were not used therefore the credit of such defective parts which is equivalent to the CVD paid on the imported spares cannot be allowed? Held that: - Credit was taken on the CVD paid on entire machine including the damaged parts as well as CVD paid on spare parts imported subsequently. In these fact the parts which got damaged and the same got removed and taken out and in place of the same new parts were fitted. Therefore, in the machine certain parts which were removed were not used in the machine. Therefore, the goods which were not used by the appellant credit of the same cannot be allowed. As regards the subsequent import of the spare which were used for replacement credit is available for the simple reason that those parts were used in the capital goods which is for further manufacture of final products. For allowing the credit it is the primary condition that goods should be used in the factory of the manufacturer in or in relation to the manufacture of final product. It is undisputed that the parts which got damaged in the capital goods, the modvat credit proportionate to said damaged parts shall not be available to the appellant as the same were not used. Extended period of limitation - Held that: - there is suppression of fact on the part of the appellant therefore; demand is not hit by limitation. Appeal dismissed - decided against appellant.
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