2000 (9) TMI 539 - AT - Central Excise

CEGAT Allows Modvat Credit on Lubricating Oil Under Rule 57A

The Appellate Tribunal CEGAT, New Delhi allowed the reference application by the assessees seeking clarification on the admissibility of Modvat credit on ... Modvat credit - input used in or in relation to the manufacture - Rule 57A of the Central Excise Rules - conflicting Tribunal decisions - reference to the High Court for a question of lawModvat credit - Rule 57A of the Central Excise Rules - input used in or in relation to the manufacture - conflicting Tribunal decisions - Reference to the Hon'ble Allahabad High Court on the question whether Modvat credit is admissible on lubricating oil under Rule 57A was directed. - HELD THAT: - The Tribunal noted divergent earlier decisions on whether lubricating oil qualifies as an eligible input under Rule 57A - including decisions holding lubricants ineligible where used for better operation of machinery and a Larger Bench decision in CCE, Meerut v. Modi Rubber Ltd. holding lubricating oils to be eligible. In the presence of this conflict and the absence of a pronouncement by a superior forum, the question was identified as one of law requiring authoritative determination. For these reasons the application for a reference was allowed and the specific question on admissibility of Modvat credit on lubricating oil was referred to the Allahabad High Court for its considered opinion. [Paras 4, 5]Reference allowed and the question 'Whether Modvat credit is admissible in terms of Rule 57A of the Central Excise Rules on lubricating oil.' referred to the Hon'ble Allahabad High Court.Final Conclusion: The application for reference is allowed; the single question of law on admissibility of Modvat credit on lubricating oil under Rule 57A is referred to the Hon'ble Allahabad High Court for determination. The Appellate Tribunal CEGAT, New Delhi allowed the reference application by the assessees seeking clarification on the admissibility of Modvat credit on lubricating oil under Rule 57A of the Central Excise Rules. The Tribunal referred the question of law to the Hon'ble Allahabad High Court for its opinion as there were conflicting decisions on the issue.