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TMI Blog1996 (7) TMI 398X X X X Extracts X X X X X X X X Extracts X X X X ..... ing oil used by the appellants continues to fall on copper sheets during the course of manufacture of copper strips and foils to protect it from developing cracks as also to render the product smooth, besides rendering the machines as installed in the factory, operational. The Assistant Commissioner who adjudicated the proceedings held that credit is allowed only on those inputs which are used in or in relation to the manufacture of final product. The lubricating oil and hydraulic oil are not used in the manufacture of final product but used for lubricating purposes. Hence, these items do not qualify to be inputs in terms of Rule 57A of the Central Excise Rules, 1944. On appeal filed by the party, the Collector (Appeals) did not agree with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fuel nor for generation of electricity. No doubt the extended coverage of the inputs in Rule 57A w.e.f. 1-3-1994 specifically provided for inputs used in the aforesaid manner. But it must be remembered that these items are mentioned in the inclusive definition of inputs and hence the actual criterion to decide whether these are inputs, would be to look into the relevant provision itself which goes by the convenient term of abbreviation `input . This term refers in the context of Rule 57A to goods used in or in relation to the manufacture of the final product. If it is established that the material or goods in question find use in the manufacture or in relation to the manufacture of the final product, the benefit cannot be denied on the only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... actual production of the final product. The fact that there is no such express provision in respect of lubricating oil cannot deprive them of the benefit of Rule 57A if they satisfy the criterion of use in or in relation to the manufacture. In my opinion, the use of lubricating oil is in relation to the manufacture even if it is not directly in the manufacturing process as raw material; without the use of such lubricating oil in the course of manufacture of paper such manufacture would become commercially inexpedient which is one of the tests laid down in the case of J K Cotton Spg. Wvg. Mills referred to above." 3. He submitted that Larger Bench of the Tribunal has also taken the view that Modvat credit is admissible if the article h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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