V.P. Gulati, Member (T)

1. This appeal is against the order of the Collector of Customs & Central Excise (Appeals), Madras. Brief facts are that the appellants are manufacturing unwrought zinc and in the process of manufacture use aluminium sheets in the electrolysis process. The aluminium sheets after use were discarded and sold as scrap. The appellants availed of MODVAT credit in respect of the Aluminium sheets to the extent of Rs. 85,132.18. The appellants were called upon to pay the amount of credit taken. The lower authorities have held that in terms of Rule 57A of the Central Excise Rules, the appellants were not eligible for the benefit of MOD-VAT credit of the duty paid on the Aluminium sheets, for the reasons that under Rule 57A (1) Aluminium sheets were part of the electrolysis equipment and since equipments were not covered by MODVAT Scheme being excluded for this purpose under Rule 57A, parts of the same were also not eligible.

2. The learned Counsel for the appellants pleaded that Aluminium sheets are used as cathodes in the electrolysis process for production of the unwrought zinc and the appellants took the credit after filing necessary declaration. He pleaded tha