2005 (12) TMI 125 - AT - Central Excise

Summary

Issues:
- Cenvat credit on lubricating oils and greases disallowed by lower authorities for being used in machinery manufacturing exempted goods.

Analysis:
The appellants had taken Cenvat credit on lubricating oils and greases, treating them as inputs used in machinery for manufacturing goods during Jan. - Nov. '01. The lower authorities disallowed the credit, citing that the machinery produced exempted goods as well. The definition of 'input' under Rule 57AA of the Central Excise Rules, 1944 was crucial in this case. The rule included lubricating oils and greases without any qualification or condition during its enforcement period. However, Rule 57AB, as presented, allowed credit for inputs received after Mar. '01. The appellants failed to prove eligibility for credit on lubricating oils and greases received in Jan. & Feb. '01. The rules only permitted credit for Mar. '01 to Nov. '01. Therefore, the appellants were deemed eligible for Cenvat credit on lubricating oils and greases used in machinery for manufacturing dutiable goods, despite exempted goods also being produced. The judgment set aside the impugned order for the period Mar. to Nov. '01, allowing the appeals only for this period.