Can that and which be used as an alternative to each other? I have seen that sometimes rule does not apply while using these words. if anyone has clear understanding please share...

THAT should be used to introduce a restrictive clause.
WHICH should be used to introduce a non-restrictive or parenthetical clause.


A restrictive clause is one which is Essential to the meaning of a sentence – if it’s removed, the meaning of the sentence will change. For example:
“The article that was written by Emma was removed from the publication.”

“That” is used in this sentence because “that was written by Emma” tells the reader which article was removed: That was written by Emma.

A Non-restrictive clause can be left out without changing the meaning of a sentence. Non-restrictive clauses are either in brackets or have Comma before and after them (or only before them if they come at the end of a sentence):
Example:
“The instructions, which were not written very clearly, confused our customers.”

In this case, “which” is used in this sentence because you can remove the clause “which were not written very clearly” without changing the meaning of the sentence.
Another way to remember which word to use—always use “that” unless you could justifiably place a comma before the clause. “Which” always mandates the use of a comma.

Rule of Thumb:
Use that with Restrictive clauses.
Use which with Non Restrictive clauses.

Example:
“The fact that he could not write, which was apparent to anyone who read his work, seemed to escape him.”

removing restrictive clause “that he could not write'' will completely change the meaning and gives no idea what the writer is talking about.
The fact, which was apparent to anyone who read his work, seemed to escape him.

removing Non restrictive clause won't change the meaning of sentence.
“The fact that he could not write seemed to escape him.”