TMI Blog2004 (12) TMI 518X X X X Extracts X X X X X X X X Extracts X X X X ..... tifications issued thereunder, any credit of specified duty lying unutilised on the 16th day of March, 1995, with a manufacturer of tractors, falling under heading No. 87.01 or motor vehicles falling under heading No. 87.02 and 87.04 of the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) shall lapse and shall not be allowed to be utilised for payment of duty on any excisable goods, whether cleared for home consumption or for export : Provided that nothing contained in this sub-rule shall apply to credit of duty, if any, in respect of inputs lying in stock or contained in finished products lying in stock on the 16th day of March, 1995. They had unutilized balance of Modvat credit amounting to Rs. 25,69,44,928.69, lying in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n imposed under Section 11AB/11AA. Hence this appeal. 2.1 After hearing both sides and considering the matter, it is found - (a1) The cost auditor as observed in para 414 of his report allowed credit on lower of the two quantities for each input, the cost auditor compared the physical quantity in stock as on 16-3-1995 as stated in the sub-headingwise balance generated by computer system with that of the sub-headingwise balance stated in RG 23 Part I register maintained manually as reflected, in the above two reports. (a2) The appellants submit that the above approach is incorrect and claim that quantity as per any one report only should be taken. If so done, denial of Rs. 1.70 crore will not survive as the discrepancy in the two r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed percentage of Modvat which is lower. Modvat percentage has to be linked to the Modvat availed to procurements. He has applied the Modvat to the stock which is not correct. Further, it is not possible to quantify WIP accurately on a given day without any prior preparation. The Modvat credit as worked out by Cost auditor on theoretical basis. It is required to be reworked. The entire quantification of Rs. 41 lacs is liable to be set aside on this ground and required to be remanded. (c) The Cost Accountant has proposed to disallow credit of Rs. 11.80 lakhs on shop made parts on grounds similar to those taken to disallowed credit of Rs. 1.70 crores. Had there been a doubt on the existence of stock, Physical verification could have b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of 83 number of Motor Vehicles has not been denied by the cost auditor in his report. These Vehicles have been cleared from works, after payment of Excise Duty. The reason given for not allowing Modvat credit amounting to Rs. 32.68 Lakhs on such vehicles as quoted in the report of the Cost Accountant is the instruction of the department as per which Modvat credit is allowable only on actual model basis. It is submitted by the appellants that the appellants are manufacturing various models and some of the models are experimental in nature with minor variation and it was not possible to foresee the sudden and abrupt amendment in law like the one introduced on 16-3-1995. Computer system maintained by the appellants record is Modvat credit avai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... captive consumption at Jamshedpur are issued to production line and hence part of work in progress in appellants hand for further production. Once they are issued for production, they are shown as issue in RG-1 register relating to forgings. Hence, the said forgings appear as nil balance in RG-1. Hence, denying credit of Rs. 114.03 lakhs is not correct. (g) Mathematical or clinical precision is not expected under the circumstances in the facts of this case. The assessee in Krishnamurthy v. CIT - 1989 (176) ITR 417 (S.C.) purchased two pieces of land and granted mining lease to a private company to extract clay for a period of 10 years at a premium and royalty. The assessee, inter alia, contented that the cost of acquisition of the l ..... X X X X Extracts X X X X X X X X Extracts X X X X
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