Commnr. Of Central Excise, Bhavnagar vs M/S. Saurashtra Chemicals Ltd

The Supreme Court interpreted Rule 57AC of the Central Excise Rules, 1944, clarifying that CENVAT credit for capital goods can be claimed only if the goods are in possession and use of the manufacturer in subsequent financial years. The Court held that the respondent was entitled to CENVAT credit for the capital goods received but not installed before April 1, 2000, subject to the conditions laid out in Rule 57AC. The appeal was allowed, affirming the High Court's decision regarding the applicability of the new rule.