SC: Consumer of capital goods cannot get the excise heading changed to claim Modvat credit
December, 03rd 2007
The Supreme Court observed last week that a consumer of capital goods could not get the excise heading changed to claim Modvat credit after the manufacturer and the excise authorities classified the goods in a different category for tariff.
The court, thus, dismissed the appeal of Sarvesh Refractories Ltd against the ruling of the Excise and Service Tax Appellate Tribunal. The firm bought 'loadall', a material handling equipment like a forklift truck or crane, from Escorts JCB Ltd. The cost included the excise duty.
The firm then claimed Modvat credit, which was rejected by the authorities. After several appeals, the Supreme Court held that tax authorities were right.