Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise & Customs, New Delhi
Subject: Admissibility of Modvat Credit on lubrication base oils used as input for the manufacture of lubricating oils and greases under rule 57A of Central Excise Rules, 1944 during period 01.03.1997 to 31.08.1997- Regarding.
It has been brought to the notice of the Central Board of Excise & Customs that field formations are denying Modvat Credit under rule 57A of the Central Excise Rules, 1944 on lubricating base oils, when used as inputs in factory for further manufacture of final product during the period 01.03.1997 to 31.08.1997.
2. The matter has been examined. As per the provision of rule 57 B, prior to 01.09.1997, Modvat credit was not available to lubricating oils, greases, cutting oils coolants. Modvat credit on these goods, however, was admissible under rule 57Q of the Central Excise Rules, 1944 even when they were used as input for further manufacture of final product. Since the intention was not to deny Modvat credit on these goods under rule 57A, clause (v) of rule 57B(2) was deleted vide Notification No. 46/97-CE(NT) dated 01.09.1997.
3. In view of the above the Board has decided that the Modvat Credit shall not be denied on lubricating base oils used in the manufacture of lubricating oils and greases during the period 01.03.1997 to 31.08.1997.