ORDER
Krishna Kumar, Member (J)
1. Heard both sides.
2. This relates to disallowance of credit of duty on furnace oil as well as light diesel oil and on Kirloskar Pneumatic make Refrigeration and Air Conditioning Model PC-2 and accessories.
3. The contention of the ld.C.A. who appeared on behalf of the Appellant is that the credit was availed on light diesel oil/furnace oil during the period July 1998 to February 1999. The Following explanation was added in – 1998 to Rule 57B under which the credit of duty has been availed: explanation “for the purpose of this sub-rule it is hereby clarified that the term inputs refers to only such inputs as may be specified in the notification issued under Rule 57A “. He referred to the decision of the apex court in the case of CCE v. ACC wherein the apex court was concerned with the credit availed under Rule 57B during the period prior to 2nd March 1998. The court held that HSD oil used as fuel for generation of electricity in the manufacture of cement is eligible for Cenvat Credit prior to addition of explanation under Rule 57-B, i.e. prior to 2nd March 1998. Thus it is evident that this judgment/laid down the ratio that the credit availed under Rule 57-A, Rule 57-B are independent. The credit availed under Rule 57B are not subject to restrictions, limitations provided under Rule 57A. There is no dispute on the fact that light diesel oil/furnace oil was specified as input under Rule 57A prior to 2nd March 1998. The dispute pertaining to the applicability of the restriction under notification No. 5/94-NT dated 1.3.1994 regarding availment of credit on light diesel oil/furnace oil, he has submitted that the explanation incorporated under Rule 57B only provides that the inputs referred only such input as specified in said notification it does not provide that the restriction on availment of credit imposed on inputs under notification No. 5/94(NT) will be applicable to the inputs specified in Rule 57B also. Ld.Commissioner adds in holding with the limitations and restrictions imposed under Rule 57A will also be applicable to Rule 57B. He also submits that the said interpretation is contrary to the ratio of judgment of the apex court (Supra). He further submits that the restriction imposed under notification 5/94 (NT) dated 1.3.1994 are not applicable. Hence credit of light diesel oil / furnace oil cannot be disallowed under Rule 57B, restrictions which are applicable under Rule 57A being Rule 57B is separate which starts with non-obstante the clause. To support his contention he relied on the decision of Jindal Polymers v. Commissioner of C.Ex., Indore .
4. As regards the credit of M/s Kirloskar Pneumatic make Refrigeration and Air Conditioning Model PC-2 and accessories ld. C.A. submitted that the clause attached to the Rule 57Q provides non-availment of credit only on compressor which are for falling under heading No. 8414 and all the kinds of accessories used in refrigeration and air conditioning appliances, restriction does not apply to refrigeration and air conditioning appliances, restrictions does not apply to refrigeration and air conditioning appliances used in the process of manufacture. He submitted that the appellants have not purchased compressor but availed credit of Kirloskar Pneumatic make Refrigeration and Air Conditioning model PC-2 accessories and same are used for the process of manufacture. Therefore, the credit of duty is permissible.
5. The ld. C.A. also reiterated the decision in the case of Khodak India Ltd v. Commissioner of Central Excise, Bangalore 2002 (147) ELT 886(Tri-Bang.)
6. After hearing and on perusal of the records, I find that the credit on above items is very much permissible. I, therefore, set aside the impugned order and allow the appeal filed by the appellant.
(Pronounced in Court on 23.12.2005)