Custom, Excise & Service Tax Tribunal
M/S. The India Cements Ltd vs Cce, Salem on 4 December, 2009
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT CHENNAI
Appeal No. E/327/2008
(Arising out of Order-in-Appeal No. 34/2008-CE (SLM) dated 29.4.2008 passed by the Commissioner of Central Excise (Appeals), Salem)
M/s. The India Cements Ltd. Appellants
Vs.
CCE, Salem Respondent
Appearance Shri M.N. Bharathi, Advocate for the Appellants Shri T.H. Rao, SDR for the Respondent CORAM Honble Dr. Chittaranjan Satapathy, Technical Member Date of Hearing: 04.12.2009 Date of Decision: 04.12.2009 Final Order No. ____________ Heard both sides.
2. Shri M.N. Bharathi, learned counsel appearing for the appellants states that the appellants namely M/s. The India Cements Ltd. have two cement factories at Sankari and Sankarnagar and they also have mines at both the places. He states that both the mines supply limestone to the nearest factory but sometimes part of the supply is also made to the other factory belonging to the appellants. The authorities below have held that these mines are found to be captive mines because sometimes part of the limestone is supplied to another unit of the same assessee. He states that this view is not permissible since Honble Supreme Courts order in the case of Vikram Cement Vs. CCE, Indore 2006 (197) ELT 145 (SC) only disallows credit when supplies were made to other cement factories of different assessees.
3. Heard the learned SDR Shri T.H. Rao, who supports the impugned order.
4. After hearing both sides, I find that the said decision of the Honble Supreme Court in the case of Vikram Cement (supra) covers the case of the appellants. The appellants are a legal entity and even though they have two cement units, the registration is in the name of the legal entity. Therefore, in respect of both the units the assessee is the same legal person. The Honble Supreme Court in para 5 of the cited decision has held as follows:-
As regards the MODVAT/CENVAT credit on capital goods, if the mines are captive mines so that they constitute one integrated unit together with the concerned cement factory, MODVAT/CENVAT credit on capital goods will be available to the assessee. On the other hand, if the mines are not captive mines but they supply to various other cement companies of different assessees, MODVAT/CENVAT credit on capital goods used in such mines will not be available to the concerned assessee under the appropriate MODVAT/CENVAT Rules. The matters are remanded to the respective original authorities for decision only on the above issue. It is seen from the above that only when supplies are made from the mines to various other cement factories of different assessees, credit on capital goods will not be available. In the present case the assessee is the same in respect of both the units and hence I am of the considered view that the appellant-assessee is entitled to the credit on capital goods used in the mines belonging to the assessee. Consequently the impugned order is set aside and the appeal is allowed.
(Dictated and pronounced in open court) (Dr. Chittaranjan Satapathy) Technical Member Rex ??
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