Cenvat credit on common inputs used for dutiable and exempt tractors depends on compliance with Rule 57CC procedure.

Credit of duty on transmission assemblies was treated as available where the assemblies were used in manufacturing both dutiable tractors and tractors exempt from duty, provided the prescribed procedure under Rule 57CC of the Central Excise Rules, 1944 was complied with. The Tribunal noted that the earlier wording in the final order did not correctly reflect the appellants' case and substituted it to state the correct position. The operative point was that entitlement to credit depended on compliance with the Rule 57CC procedure in cases of common inputs used for both taxable and exempt products.

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Issues: Whether credit of duty paid on transmission assemblies was available when such assemblies were used in the manufacture of both dutiable tractors and tractors exempt from duty, subject to compliance with the prescribed procedure under Rule 57CC of the Central Excise Rules, 1944.

Analysis: The Tribunal accepted that the earlier sentence in the final order did not correctly reflect the appellants' case. It held that the transmission assemblies were used in the manufacture of both categories of tractors and that the entitlement to credit had to be examined along with the procedural requirements under Rule 57CC. The impugned sentence was therefore substituted to state that credit was available where the prescribed procedure was followed.

Conclusion: The appellants were held eligible to take credit of duty paid on the impugned transmission assemblies, whether used in the manufacture of dutiable tractors or tractors exempt from duty, subject to compliance with Rule 57CC.

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