Judgment

1. Leave granted.

2. Interpretation of Rule 57 AC of the Central Excise Rules, 1944 (for short “the Rules”) is in question in this appeal which arises out of the judgment and order dated 12.01.2006 passed by the High Court of Gujarat at Ahmedabad in Tax Appeal No. 862 of 2005.

3. Respondent is engaged in manufacture of excisable goods, viz., Soda Ash, Sodium Bicarbonate and Caustic Soda. It is registered under the Central Excise Tariff Act, 1985. Its products are governed by the provisions of the Chapter VIIA of the Rules. It has been availing the benefit of credit of duty paid on inputs as well as capital goods under the provisions of the Rules.

4. On or about 24.09.1996, the respondent imported two generator sets. We are herein concerned with the second one Although it was received by the respondent on 24.10.1998, the same admittedly was not installed prior to 1.04.2000. In the relevant financial year, the rule which was in operation was Rule 570(3) of the Rules was as under:

“57Q(3). Notwithstanding anything contained in sub-rule (1), the manufacturer of the final products shall be allowed credit of additional duty leviable under section 3 of the Customs Tariff Act, 1975(51