1998 (2) TMI 308 - AT - Central Excise

Summary

Issues:
1. Eligibility of lubricating oil for Modvat credit under Rule 57A of Central Excise Rules, 1944.
2. Interpretation of previous tribunal decisions on Modvat eligibility.

Analysis:
The case involved a reference application filed by the appellants regarding the eligibility of lubricating oil for Modvat credit under Rule 57A of the Central Excise Rules, 1944. The appellants, M/s. Apollo Tyres Ltd., were using various equipment in their factory and availing Modvat credit. The lower authorities denied Modvat benefit for lubricating oil, stating it was used on machines and not in the manufacture of the final product. This decision was upheld by the tribunal, citing earlier decisions in similar cases. The appellants argued that a question of law had arisen and referred to a Calcutta High Court decision to support their stance that lubricating oil did not fall under categories like plant or machinery. The tribunal had relied on its previous decisions, but considering the legal question raised, decided to refer the matter to the High Court of Kerala for clarification.

The key contention was whether the lubricating oil used by the appellants in their factory for various machines qualified for Modvat credit under Rule 57A. The tribunal, while following its earlier decisions, acknowledged the legal question raised by the appellants regarding the classification of lubricating oil. The appellants argued that based on a Calcutta High Court decision, lubricating oil did not fit into categories like plant or machinery, thus making it eligible for Modvat credit. The tribunal, recognizing the legal complexity of the issue, referred the matter to the High Court of Kerala for a definitive opinion on the eligibility of lubricating oil for Modvat credit under Rule 57A.

In conclusion, the tribunal found that a question of law had indeed arisen in the case concerning the eligibility of lubricating oil for Modvat credit under Rule 57A. As a result, the tribunal referred the specific legal question to the High Court of Kerala for a detailed opinion. The Registry was directed to send the necessary documents to the High Court for further consideration and clarification on the matter.