PerGowri Shankar :

The common question in both these appeals by the Commissioner is the eligibility to credit in terms of Rule 57Q of the duty paid on the engine and alternators which together constitute a diesel generating sets.

2. Each of the respondent is engaged in the manufacture of rayon yarn and nylon yarn, tyre cord fabrics and similar products. Each of them entered into a contract for installation of a diesel generating set in its factory with the fabricator M/s. Modi Mirrless Blackstone Ltd., in the case of Century Rayon Ltd. and M/s. Wartsila NSD (India) Ltd. in the case of National Rayon Corporation Ltd. These fabricators entered into an arrangement with the manufacturer by which they sold the engine and alternator initially, and subsequently assembled these into a generating set in the factory.

3. The respondents took credit of the duty paid on the alternator and the engine under Rule 57Q. The department objected to by issue of notices. The notices were commonly worded, proposing to deny the credit on the ground that the components i.e. engine and alternator were exclusively used in the manufacture of final product, diesel generating set, exempted from payment of dut