Customs, Excise and Gold Tribunal - Delhi
C.C.E., Raipur vs M/S. Raymond Cement Works on 29 December, 2000
ORDER S.S. Kang, J.
1. The revenue filed this reference application for referring the following question of law to the Hon'ble High Court:
"Whether the MODVAT credit on explosives used for blasting of Lime Stone mines for obtaining "Lime Stone" a basic raw material for manufacture of cement, is admissible or under Rule 57-A of Central Excise Rules, or otherwise, which are subsequently transported to the cement units to be used for manufacture of cement."
Heard both sides.
In this case the Tribunal, vide Final Order No. 2566-73/96-NB dated 28.10.96 held that MODVAT credit was available to the explosives used in the mines by the cement manufacturers, after relying upon the earlier decision in the case of Associated Cement Co.reported in 1991 (51) E.L.T.415.
The contention of the revenue is that the explosives are used in the mines, which are away from the cement factory, therefore they are used in the factory where the cement is being manufactured. Rule 57 A of Central Excise Rules provides that MODVAT credit shall be taken in respect of the inputs used in or in relation to the manufacture of final product in the factory. Revenue relied upon the Larger Bench Tribunal decision in the case of Jaypee Rewa Cement vs C.C.E. reported in 2000 (38) RLT 1111 wherein the Tribunal held that the MODVAT credit shall not be admissible in respect of explosives as the same are not used in the factory where the cement is being produced. The facts remains that the factory, as defined under the Central Excise law and the explosives are not used in the manufacture of limestone in the factory. Therefore, the point of law, as framed above, arises and requires to be referred to the Hon'ble High Court of Madhya Pradesh. references application is allowed.s (Distated in Court).