Kerala High Court
Malabar Cements Ltd vs Commissioner Of Central Excise on 22 September, 2008
Author: S.Siri Jagan
Bench: S.Siri Jagan
IN THE HIGH COURT OF KERALA AT ERNAKULAM
OP.No. 34922 of 2000(G)
1. MALABAR CEMENTS LTD, PALAKKAD
... Petitioner
Vs
1. COMMISSIONER OF CENTRAL EXCISE, KZD
... Respondent
For Petitioner :SRI.A.K.JAYASANKAR NAMBIAR
For Respondent :SRI.JOHN VARGHESE, ASSISTANT SG
The Hon'ble MR. Justice S.SIRI JAGAN
Dated :22/09/2008
O R D E R
S.SIRI JAGAN, J.
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O.P.No.34922 of 2000
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Dated this the 22nd day of September, 2008
J U D G M E N T
The petitioner is a company, of which the Government of Kerala is the major share holder, engaged in the business of manufacture of cement. For the purpose of obtaining raw materials for the cement factory, the petitioner was granted a lease of some vested forest in Walayar, from where raw materials are mined and transported to the factory premises through a rope way, which raw materials are used in the factory. At the time of starting of the factory, the petitioner was obliged to obtain a licence under Rule 174 of the Central Excise Rules, 1944, and get a site plan of their premises approved by the Central Excise Authority. The petitioner would contend that at that time the petitioner submitted a site plan including the factory, the mines and the rope way, which site plan was approved by the respondents. Later on, a question arose in respect of availing of modvat credit in respect of cement factories, as to whether inputs used in the mines are also eligible for modvat credit. There was a further issue as to whether capital goods used in the mines also are eligible for modvat o.p.14697/00 2 credit. These issues are no longer res integra in view of the decisions of the Supreme Court in JAYPEE REWA CEMENT v. COMMISSIONER OF CENTRAL EXCISE, M.P. [2001 (133) E.L.T.3. (S.C.)] and VIKRAM CEMENT v. COMMISSIONER OF CENTRAL EXCISE, INDORE [2006 (194) E.L.T. 3 (S.C.)], as per which the Supreme Court held that irrespective of whether capital goods and other goods are used in the mines or in the factory, the same are eligible for modvat credit. As such, presently the petitioner is not much concerned about the availability of modvat credit in respect of capital goods and other goods used in the mines and ropeway. But if in future, if the rules are amended, confining such relief only to either the factory premises or approved site plan, then a difficulty may arise for the petitioner, if the approval of the original site plan is changed. Therefore, the petitioner seeks to resolve a dispute as to whether the original site plan approved by the Central Excise Authorities for the petitioner included the mines and ropeway also is liable to be changed by the Central Excise authorities, which was done in the petitioner's case, which is the purpose of this original petition.
2. When the issue settled by the Supreme Court in the o.p.14697/00 3 above decisions were still at large, the issue arose in respect of the petitioner themselves as to whether the original approved site plan included mines also. The Assistant Commissioner of Central Excise, Palakkad, considered the question by Ext.P4 order wherein it was specifically stated thus:
"..... The assessee produced ground plan and on the spot study conducted by me also, I am convinced that the mining areas also come under the purview of factory as has been held by the Commissioner of Central Excise & Customs (Appeals), Cochin in his order in appeal No.166/96 (C) dated 29.3.96. Also explosive used by the assessee in mines are allowed modvat credit in an earlier order in Appeal No.93/83 (C) Dt. 18.6.93 issued by Commissioner of Central Excise & Customs (Appeals) Cochin. For all these reasons, modvat credit availed on goods used in the mine of the assessee is allowable."
A decision of the Commissioner of Central Excuse & Customs (Appeals) is also referred to in Ext.P4. While so, the third respondent wanted the petitioner to produce the approved ground plan in respect of the petitioner's premises. Apparently the Central Excise authorities were not in possession of the original ground plan approved by them. The petitioner also did not have the same as being an old document, the same could not be traced. Pursuant to the direction from the 3rd respondent the petitioner produced the copies of the ground plan of their factory premises which included the mines also. The respondents refused to accept the same and they wanted the petitioner to submit a o.p.14697/00 4 fresh ground plan confining the premises only of the factory. The petitioner's objection in this regard was rejected by Ext.P8 order of the 3rd respondent. Accordingly, the 3rd respondent approved a fresh ground plan of the factory alone excluding the mines and the rope way by Ext.P8 letter. That is under challenge in this writ petition.
3. The petitioner seeks the following reliefs:
"(i) Call for the records leading to Ext.P8 letter of the third respondent and quash the same by the issuance of a writ of certiorari or such other writ, order of direction.
(ii) issue a writ of mandamus or such other writ, order or direction, directing the respondents to approve the plant, mine and ropeway of the petitioner company as the approved/licensed premises for the purposes of the Central Excise Act and Rules."
(iii) To grant a stay of all further proceedings pursuant to Ext.P8 letter issued by the third respondent pending disposal of the original petition.
4. The only question which arises for consideration in this case is as to whether as per the original ground plan submitted by the petitioner and approved by the Central Excise Authorities consisted of the mines and the ropeway, and whether merely for non availability of the approved plan it can be stated that the original ground plan approved did not consist of mines also, if there are sufficient materials available on record to prove that it o.p.14697/00 5 really did. Fortunately for the petitioner they do have a very cogent and reliable material in this regard viz., Ext.P4 order passed by the Assistant Commissioner of Excise himself, which categorically held that the original approved plan included the mines also. I am of opinion that the respondents cannot now resile from Ext.P4 and take a different stand that in the absence of the original plan approved, the petitioner has to produce a ground plan excluding the mines, so as to approve the ground plan with the factory alone. Since the rope way is one connecting mines and the factory, it has to be either part of the mines or the factory or both. As such, if mines and factory were included in the original plan the rope way also has to be part of the same. Even otherwise the respondents could not put forward any cogent explanation as to how they could have rejected the inclusion of the mines also in the approved ground plan. In the above circumstances, I am of opinion that the respondents cannot now insist on the petitioner producing a ground plan of the factory alone and approve only that ground plan. In the above circumstances, Ext.P8 is quashed and the respondents are directed to approve a ground plan of the petitioner including the o.p.14697/00 6 factory, mine and rope way for the purpose of record as the original approved ground plan, which shall govern all future transactions in respect of Central Excise matters of the the petitioner.
The original petition is allowed as above.
Sd/-
sdk+ S.SIRI JAGAN, JUDGE
///True copy///
P.A. to Judge
o.p.14697/00 7
S.SIRI JAGAN, J.
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O.P.No.34922 of 2000-G
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J U D G M E N T
22nd September, 2008