Cir. No.429/62/1998-CX, dt. 03/11/1998
- Document type
- Circular
- Reference no.
- E
- Dated
Modvat credit admissible on base oils
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 provisions of rule 57B, prior to 01.09.1997, Modvat credit was not available to lubricating oils, greases, cutting oils and 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.
Sd/-
(S.K Sinha)
Under Secretary to the Govt. of India