2002 (4) TMI 617 - AT - Central Excise

Summary

Issues:
1. Admissibility of Modvat credit on goods used in the mine but not in the registered premises.
2. Whether the capital goods were actually used in the factory premises.

Issue 1: Admissibility of Modvat credit on goods used in the mine:
The appellants claimed Modvat credit on items used in mining activities outside the concentration plant. The adjudicating authority denied the credit, stating that only the premises approved as a factory could be considered for credit. The Commissioner (Appeals) upheld this decision, citing a previous Tribunal's decision. In the current appeal, the consultant argued that the Tribunal's decision had been overturned by the Supreme Court. The consultant also claimed that the capital goods were used in mining activities beneath the concentration plant, part of the approved factory plan. The Tribunal noted that the mine's inclusion in the factory premises needed verification as only the Rampura Agucha mine's approval was cited. The Tribunal set aside the order, directing the Commissioner (Appeals) to determine if the mines were within the approved factory plan for Modvat credit eligibility.

Issue 2: Actual usage of capital goods in the factory premises:
The key issue was whether the capital goods were genuinely used in the factory during the relevant period. The Tribunal agreed with the adjudicating authority that areas included in the approved ground plan under Rule 44 of the Central Excise Rules constituted the factory premises. While the concentration plant was within the approved plan, the mine's status was disputed. The lower appellate authority did not address this challenge, denying Modvat credit based on the Tribunal's decision in another case. The Tribunal emphasized the need to verify if all mines were part of the approved ground plan, as only the Rampura Agucha mine's approval was presented. The Tribunal remanded the case to the Commissioner (Appeals) to determine if the subject goods were used in the factory as defined under the Central Excise Act, with Modvat credit eligibility contingent on this verification.

In conclusion, the Tribunal's judgment addressed the admissibility of Modvat credit on goods used in mining activities outside the registered premises and the actual usage of capital goods in the factory premises. The decision highlighted the importance of verifying if all mines were within the approved factory plan to determine Modvat credit eligibility. The case was remanded for further examination to ascertain the factual usage of the goods in the factory, emphasizing the need for a detailed assessment by the Commissioner (Appeals) in accordance with the law.