Customs, Excise and Gold Tribunal - Mumbai
Manikgarh Cement Ltd. And Ors. vs Cce on 29 October, 2003
Equivalent citations: 2004(112)ECR159(TRI.-MUMBAI)
ORDER K.D. Mankar, Member (T)
1. Heard both sides.
2. The issue involved in all the three appeals, being the same, the three appeals are decided through a common order.
3. The appellants are using explosives in their mines for blasting out limestones deposits. Limestone mines are not a part of the factory. This fact is not disputed. The credit of duty paid on 'explosives' has been claimed on the ground that use of explosives for extracting limestone which in turn, is used in the cement factory for manufacture of cement, is covered under Modvat credit rules. It is pleaded that the term "Input" has been defined to be goods which are used "IN of IN RELATION" to the manufacture of the final product. The explosives have been used in the process of extraction of limestone and the latter is used in the cement factory factory for manufacture of cement. Therefore, though the initial use of explosives is not in the factory premises, the intermediate product obtained through the use of explosives i.e. limestone is utilised in the cement factory. Therefore, it is pleaded that the use of explosive in the 'Mine' outside the factory does not render the inputs ineligible to Modvat credit.
4. The learned Counsel places reliance on the judgment of the Honourable Supreme Court in the case of Jaypee Rewa Cement v. Commissioner of Central Excise, M.P. In the said judgment the Honourable Supreme Court has held that:
Modvat - Inputs need not to be utilized only within the factory premises in terms of erstwhile Rule 57A of Central Excise Rules, 1944 - Explanation contained in Rule 57A ibid is merely meant to enlarge the meaning of the word "input' and does not in any way restrict the use of the input within the factory premises nor does require the inputs to be brought into the factory premises at any point of time.
5. The learned D.R. fairly accepts this position in the light of Supreme Court judgment in Jaypee Rava Cement (Supra).
6. In the light of discussions above, the orders of the lower authorities are set aside and the appeals are allowed with consequential relief, in accordance with law.
(Pronounced in Court)