2004 (2) TMI 553 - AT - Central Excise

Summary

Issues:
- Eligibility of explosives used for mining limestone at off-factory sites for input duty credit.

Analysis:

The judgment in question dealt with the issue of whether explosives used by the assessee for mining limestone at off-factory sites were eligible for input duty credit. The definition of "input" under Clause (d) of Rule 57AA was crucial in determining the eligibility. The lower authorities had disallowed the credit, stating that the explosives were not used within the factory of production of cement, thus not meeting the criteria to be considered as input under the said clause.

During the hearing, the appellant's counsel argued that previous Tribunal decisions in favor of the assessee, such as CCE v. Birla Corporation Ltd. and CCE v. J.K. Udaipur Udyog Ltd., supported the eligibility of explosives for input duty credit. On the contrary, the Departmental Representative cited a conflicting decision in the case of Manglam Cement Ltd. The conflicting decisions raised the need for resolution by a Larger Bench to address the disparity.

Upon careful consideration, the judge referred to the previous cases of J.K. Udaipur Udyog Ltd. and Birla Corporation Ltd., emphasizing the applicability of the Supreme Court's decision in Jaypee Rewa Cement regarding the admissibility of Modvat credit to explosives. The judge noted that the decision in Manglam Cement Ltd. deviated from the established precedent and created a conflict. Consequently, the judge directed the Registry to present the matter before the Hon'ble President for resolution by a Larger Bench, aiming to reconcile the conflicting interpretations and provide clarity on the issue of input duty credit for explosives used off-factory sites in mining activities for manufacturing purposes.