2003 (11) TMI 542 - AT - Central Excise

Summary

Issues:
- Denial of Modvat credit on explosives used at off factory mines for producing limestone
- Interpretation of the definition of "inputs" under Rule 2(f) of the Cenvat Credit Rules, 2001

Analysis:
1. The appeals challenged the denial of Modvat credit on explosives used at off factory mines for producing limestone during specific periods. In Appeal No. 896/2003, the issue was whether the explosives used were eligible inputs for Modvat credit. The decision of the Bench in previous cases supported the eligibility of such explosives as inputs for Modvat credit under Rule 57AA of the Central Excise Rules, 1944. As the issue was covered in favor of the appellants, Appeal No. 896/2003 was allowed.

2. In the remaining two appeals, the period of dispute fell under the Cenvat Credit Rules, 2001. The denial of credits on explosives was based on the argument that explosives did not fit the definition of "input" under Clause (f) of Rule 2 of the Cenvat Credit Rules, 2001. The Counsel argued that the new definition was similar to the previous one under Rule 57AA(d) of the Central Excise Rules, 1944, and thus, previous decisions should apply to the current cases.

3. The Department argued that the Supreme Court's judgment in the Jaypee Rewa Cement case allowed input duty credit on explosives under specific rules that did not have corresponding provisions in the Cenvat Credit Rules, 2001. However, the Counsel contended that Rule 3 of the Cenvat Credit Rules, 2001 adequately covered the situations addressed by the previous rules. The Tribunal found that the definitions of "inputs" were similar, and the decisions in previous cases should apply to the current appeals, leading to the allowance of both appeals.

4. The Tribunal ordered the refund of any deposit made by the appellants under Section 35-F of the Central Excise Act within 30 days of the receipt of the order. The judgment clarified the eligibility of explosives used at off factory mines for Modvat credit and the interpretation of the definition of "inputs" under the Cenvat Credit Rules, 2001, aligning it with previous decisions under the Central Excise Rules, 1944.