SUDARSANAM SPINNING MILLS Vs. COMMISSIONER OF C. EX.

JUDGEMENT

(1.) THE appellants in these appeals had taken Cenvat credit on 'lubricating oils' and 'greases' (treating these items as inputs), which were used as lubricants for machinery in their factory during the period Jan. - Nov. '01. Both the lower authorities disallowed this credit to the assessee on the ground that the machinery in which the lubricants were used for the manufacture of exempted goods also. Hence these appeals.

(2.) AFTER hearing both sides and considering their submissions, I find that the appellants are banking on the definition of 'input' given under Rule 57AA of the Central Excise Rules, 1944. This definition reads as under : - input" means all goods, except high speed diesel oil and motor spirit, commonly knows as petrol, used in or in relation to the manufacture of final products whether directly or indirectly and whether contained in the final product or not, and includes accessories of the final products cleared along with the final product, goods used as paint, or as packing material, or as fuel, or for generation of electricity or steam used for manufacture of final products or for any other purpose, within the factory of production, and also includes lubricating oils, greases, cutting oils and coolants. It appears from the above definition that, for the period during which Rule 57AA was in force, inputs on which Cenvat credit was admissible included lubricating oils and greases without any qualification or condition. Rule 57AB, in its form placed before me, allowed Cenvat credit to the manufacturer of final product in respect of inputs or capital goods received in his factory on or after the first day of Mar. '01. No provision relating to inputs or capital goods received in a factory prior to the said dale has been placed before me. In other words, the appellants have not established that they were eligible to take Cenvat credit on lubricating oils and greases received in their factory in the months of Jan. & Feb. '01. The Rules shown to me pertain to inputs and capital goods received in a factory on or after 1 -3 -2001 and these Rules allowed input -duty credit on lubricating oils and greases to the party for the period Mar. '01 to Nov. '01. Hence in relation to this period, it is held that the appellants were eligible to take Cenvat credit on lubricating oils and greases, which were used in their machinery inasmuch as such machinery was used for the manufacture of dutiable goods also. That certain exempted goods also were generated in the process did not ipso facto disentitle the assessee from availing the above credit.

(3.) IN the result, the impugned order is set aside to the extent it relates to the period Mar. to Nov. '01. The appeals are allowed to this extent only.