2014 (10) TMI 637

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....sed in the manufacturing of final products. There are 15 items for which credit was taken to the tune of Rs. 71,34,612/-. However, the Revenue found that these items are not considered as inputs under Rule 57A of Central Excise Rules and issued a show cause notice dated 24.2.1997. 2. The Assessee replied stating that the credit was extended in respect of all goods which are used in or in relation to the manufacture of the final products, therefore, they are entitled to avail credit. The original authority, considered item by item and rejected the claim of the assessee. 3. The assessee went on appeal to the Commissioner (Appeals)and the Commissioner (Appeals) allowed credit only to 4 items and disallowed the following 11 items. (i) ....

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.... 6. Heard Mr.Vikram Ramarkishnan for appellant/revenue and Mr. Parthasarathy for the assessee. 7. The learned counsel for the appellant/revenue submitted that the assessee is not entitled for such credit as the inputs are not used directly or indirectly for the manufacture of final products and they are not eligible for credit under Rule 57A. The learned counsel relied on the decision reported in Saraswathi Sugar Mills v. CCE [2011] 32 STT 469 (SC). 8. On the other hand, Mr. Parthasarathy, learned counsel for the assessee would submit that the Tribunal in the earlier case of the assessee reported in Madras Aluminium Co. Ltd. (supra) has held that the inputs are directly or indirectly used in the manufacture of final products and has a....

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....e machinery for effective functioning as held in the case of Cans & Closures Ltd - 1991 (56) ELT 474 and CCE v. Asian Cables Ltd. 1996 (81) ELT 509 and J.K. Sunthetics Ltd. v. CCE 1996 (85) ELT 286 of Rodine, where credit has been allowed as eligible on chemicals used in cleaning and preparation of the machinery for more effective functioning of the machine as eligible inputs. Therefore, no reason is found to deny the credit on these items." 12. This eligibility was also confirmed by a division bench of this court in assessee's own case reported in Madras Aluminum Co. Ltd. 13. As far as item no.3 Aquachem is concerned, the learned counsel for the respondent would submit that it is also used for the same purpose and therefore, it i....