ORDER
S.S. Kang, Member (J)
1. Revenue filed this appeal against the order-in-appeal dated 7-7-1999 passed by the Commissioner of Central Excise (Appeals).
2. In the impugned order, the benefit of Modvat credit in respect of flex oil and lubricating oil was allowed to the respondents.
3. Ld. DR, appearing on behalf of the revenue submits that flex oil and lubricating oil are not inputs in terms of Rule 57A of the Central Excise Rules and these are not used in or in relation to the manufacture of the final product and these are used merely for maintenance of machinery.
4. Heard both sides.
5. The issue whether the lubricating oil is entitled for the benefit of Modvat credit is now settled by the Larger Bench of the Tribunal in the case of C.C.E., Meerut v. Modi Rubber Ltd. reported in 2000 (38) RLT 718. In this case the Tribunal held that the lubricating oil used in machines for manufacture of final product is entitled for Modvat credit as incut.
6. In respect of flex oil, the contention of the respondents is that the flex oil is used as an inputs at the stage of mixing of various chemicals with rubber at the mixing mill for the manufacture of compounding rubber, which is used in the manufacture of their final proudct i.e. ‘V belts. This fact is not controverted by the revenue. Therefore, the flex oil is an essential inpvit for the manufacture of final product.
7. In view of the above discussion, I find no merit in the appeal and reject the same. The cross-objection filed by the respondents is also disposed of in the same terms.
