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The Commissioner of Central Excise Versus M/s Sundara Industries (I) (P) Ltd.

2015 (12) TMI 1447 - KARNATAKA HIGH COURT

MODVAT Credit - Whether the assessee can be granted modvat credit without fulfilling the conditions of Rule 57R of the erstwhile Central Excise Rules 1944 viz. production of a certificate from M/s KSFC to the effect that the assessee have paid the amount of CVD to them and that M/s KSFC have not claimed depreciation amount under the Income Tax Act - Held that:- Due to some disputes between the KSFC and the respondent, the respondent was not in a position to make available of the required documen .....

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INDIA] has given a finding that the denial of Modvat credit to the appellant on the ground that KSFC has not furnished the required certificate would result in gross miscarriage of justice - cost of the capital goods shall be reduced by the amount of duty to excise in respect of which a claim of credit has been made and allowed under the Rules, KSFC cannot claim depreciation on the portion of the capital goods representing countervailing duty taken as Modvat credit. - order passed by the Tribun .....

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ditions of Rule 57R of the erstwhile Central Excise Rules 1944 viz. production of a certificate from M/s KSFC to the effect that the assessee have paid the amount of CVD to them and that M/s KSFC have not claimed depreciation amount under the Income Tax Act? 2. Heard learned counsel appearing for the appellant. No representation on behalf of the respondent. 3. The brief facts of the case are that the respondent filed a declaration on 01.02.1999 under Rule 57T of the Central Excise Rules, 1944 (h .....

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of Rule 57R of the Rules. The respondent filed objections contending that there was some dispute between KSFC and the respondent, as such, KSFC has not issued the Certificate, availing Modvat by the respondent was already informed to KSFC, in the circumstances, the KSFC cannot claim depreciation on the amount representing countervailing duty in view of Explanation 9 to Section 43 of the Income Tax Act, 1961, introduced retrospectively with effect from 01.03.1994. However, the Original Authority .....

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ds that the judgment relied upon by the Tribunal to arrive at a conclusion that non-compliance of a condition prescribed under Rule 57R(3) of the Rules cannot result in the denial of a substantial benefit is not applicable to the facts of the present case. The Hon ble Apex Court has rendered the said judgment in a different context relating to Section 25(1) of the Customs Act, 1962. Further, it is contended that in the absence of furnishing the required documents as per Rule 57(6) of the Rules, .....

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dit. - (1) xxxx (2) xxxx (3) The credit of the specified duty paid on the capital goods shall be allowed to a manufacturer if the capital goods are acquired by the manufacturer on lease, hire-purchase or loan agreement from a financing company subject to the following procedure, namely :- (i) xxxx (ii) The manufacturer availing credit of the specified duty paid on capital goods, who has entered into a financial arrangement, - (a) xxxx (b) for financing the cost of such capital goods including th .....

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ciation under the Income-tax laws on that part of the value of capital goods which represents the amount of specified duty paid on such capital goods. 6. It is clear from the said Rule that in order to avail Modvat credit, it is required to repay the Countervailing duty before payment of the first instalment of the loan to the financier. This is not disputed in the present case. However, the only question of law raised before this Court is regarding availing of the Modvat credit without producin .....

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