TMI Blog2004 (3) TMI 295X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Commissioner (Appeals), whereby the Commissioner (Appeals) upheld the restriction of Modvat credit to the extent of 10% as prescribed in Notification No. 5/94-C.E. dated 1-3-1994, as amended, in respect of certain petroleum products used by them as "fuel". The Commissioner (Appeals), however set aside the penalty and interest. The revenue appeal E/1900/2001 is against this part of the orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in exercise of powers conferred under Rule 57A prescribing a ceiling limit for taking credit must therefore be construed to mean credit restriction only when the use is other than fuel. 4. It must be remembered that, despite the provisions of modvat having been extended to inputs falling under Chapter 27, the use of these inputs in the user factory as a fuel could not entitle the user to take M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rted in 2001 (129) E.L.T. 467 (Tri-Del.), which follows amongst others the decision of the Tribunal in the case of Jindal Polyester v. Commissioner of Central Excise, Meerut. All these decisions hold that the cap of 10% credit prescribed is the Notification No. 5/94-C.E. (N.T.) on harmonious construction, shall also apply to inputs used as fuels, which have been notified under Rule 57B to be the " ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the judgments referred to above can lead to a conclusion that, restrictions imposed in terms of notification issued under Rule 57A can automatically apply to inputs notified under Rule 57B. It must be remembered that, Rule 57A, is a parent rule, and Notification No. 5/94-C.E. (N.T.) or its amending Notification 14/97-C.E. (N.T.), dated 3-5-1997 are its off springs. When the applicability of the pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... This is a clear admission of the fact that, unless and until, a corresponding cap was also introduced for credit in respect of inputs notified under Rule 57B; the appellants were entitled to take full credit of the duty paid on the inputs in question. 7. In the light of the analysis made by me above, I hold that orders of the lower authorities restricting the credit on inputs used as fuels were ..... X X X X Extracts X X X X X X X X Extracts X X X X
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