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Case Law Details

Case Name : Commissioner of Central Excise Vs M/s. Modernova Plastyles Pvt. Ltd. (Bombay High Court)
Appeal Number : Central Excise Appeal No. 27 of 2004
Date of Judgement/Order : 16/02/2015
Related Assessment Year :
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Brief Facts of the case

The assessee is engaged in manufacture of plastic articles/components and parts by using injection moulding machines. In the present matter the moulds, used to manufacture, in this case cabinets for television sets­ the finished product, were supplied to the Assessee by the Original Equipment Manufacturers. The dispute relates to the years 1997­-98, 1998­-99.

A show cause notice issued alleging that the assessee has availed and utilized inadmissible Modvat Credit on the moulds as capital goods in contravention of Rules 57Q, 57R(3) and 57(T) of Central Excise Rule, 1944. The show cause notice has been issued for the reason that the Assessee is neither owner of the capital goods nor has it hired the same on lease, hire purchase or loan agreement from the financer.

The show cause notice was replied by the assessee, pointing out that as alleged in the show cause notice, it was not necessary that the moulds should be owned by the assessee since Rule 57Q and 57R underwent amendments after 1994.

The Commissioner passed an order in favour of the Revenue confirming the demand in the show cause notice with penalty and interest. Aggrieved by said order, assessee was in Appeal before CESTAT, Mumbai which has allowed the appeal by taking into account various decisions of the Hon’ble Supreme Court as well as this Court holding that the question which has been posed is no longer res integra, and also with reference to the decision in the case of German Remedies Ltd. V/s. Commissioner of Central Excise, Goa reported in 2002 (144) E.L.T. 606.

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