Customs, Excise and Gold Tribunal - Delhi
Collector Of Central Excise vs New Vikram Cements on 30 May, 1997
Equivalent citations: 1997(95)ELT98(TRI-DEL)
ORDER G.R. Sharma, Member (T)
1. The Collector (Appeals), Indore, in his order had held that Modvat credit of duty taken on grinding media and explosives is admissible to the assessee. Being aggrieved by this order, the Commissioner, Central Excise has filed the present appeal. The respondents have filed cross-objections. The respondents herein are engaged in the manufacture of cement. They filed a declaration in respect of explosives and grinding media balls. The Asstt. Collector held that Modvat credit would not be available to the respondents as the nature of grinding media balls is akin to that of an appliance equipment and tools. The Department also alleged that since explosives are used in mines and not in the licensed premises of the factory under the Central Excise law, Modvat credit was not admissible. The Assistant Collector as the adjudicating authority decided the issue against the assessee whereas in appeal, the ld. Collector (Appeals) upheld the contention of the assessee and allowed their appeal.
2. Shri Jangir Singh, ld. JDR, appearing for the appellant Commissioner submits that the order of the Tribunal in the case of Indian Rayon & Industries Limited has not been accepted by the Department; that an application has been filed in High Court; that the Central Board of Excise and Customs, in their Circular F. No. 261/25/1/88-CX. 8, dated 16-2-1988 clarified that Modvat credit is inadmissible on grinding media balls. The ld. DR also submits that the Department has not accepted the Tribunal's order about admissibility of Modvat credit on explosives and that a reference application was made to the Tribunal; that the Tribunal has referred the case to the Honourable High Court of Patna that the Central Board of Excise and Customs in the Circular cited above also clarified that the Modvat credit is inadmissible to explosives. The ld. DR summing up his arguments, therefore, submitted that the order of the ld. Collector (Appeals) may be set aside and the appeal may be allowed.
3. Shri P.N. Kaul, ld. Advocate, appearing for the respondents herein submits that in so far as grinding media is concerned, the appellant is fully covered by the decision of this Tribunal in the case of Indian Rayon and Industries Limited reported in 1995 (76) E.L.T. 358 and further by a decision of the Tribunal in the case of Collector, Central Excise v. Durgapur Cement reported in 1997 (90) E.L.T. 197. The ld. Counsel also submitted that the Tribunal has since decided about the admissibility of Modvat credit on explosives in a number of cases and one of the case was that of Associated Cement Companies Limited reported in 1991 (55) E.L.T. 415. The ld. Counsel, therefore, submitted that both the issues taken up in appeals are fully covered by the decision of the Tribunal and, therefore, prays that the appeals may be rejected.
4. Heard the submissions, of both sides. We find that no doubt these issues have been taken to High Court on a point of law; however, we do not see any stay of the orders cited and relied upon by the respondents herein. We find that the orders cited and relied upon by the respondents herein very clearly hold that Modvat credit shall be admissible on the use of grinding media balls used for grinding limestone and other materials in ball mills in a cement factory. We also note that these grinding balls are neither apparatus, appliances nor parts of machines. We also note even if they are treated as parts of machine, the larger bench of this Tribunal has held that parts of machines are not included in the exclusion clause under Rule 57A of the Central Excise Rules 1944. We, therefore, agree with the decision of the Tribunal that grinding media balls are inputs and eligible for Modvat credit.
5. In-so-far as explosives are concerned, we find that the issue is squarely covered by the decision of the Tribunal in the case of Associated Cement Companies Limited reported in 1991 (55) E.L.T. 415 and also in the case of Indian Rayon & Industries Limited reported in 1995 (76) E.L.T. 358. We do not see any reason to disagree with the findings of the Tribunal in this case. Accordingly, we hold that Modvat credit will be admissible to the assessee on use of explosives as inputs.
6. In view of the above findings, the impugned order is upheld and the appeal is rejected. The cross-objections are also disposed of as above.