2014 (9) TMI 978 - HC - Central Excise

Denial of CENVAT Credit - whether the excise duty paid on explosives can be given credit to under the scheme - Held that - Supreme Court in J.K. Udaipur Udyog Limited s case (2004 (9) TMI 101 - SUPREME COURT OF INDIA) held that the excise duty paid on explosives used for the manufacture of cement in the mines, cannot be given credit under the CENVAT scheme. However, recently, in Vikram Cement v. Commissioner of Central Excise, Indore 2006 (1) TMI 130 - SUPREME COURT OF INDIA , the Supreme Court overruled the judgment in J.K. Udaipur Udyog Limited s case (supra). It was held that the duty paid on explosives that are used in the mines in the course of manufacture of cement, can be given credit under the scheme. - Decided in favour of assessee.

Summary

Issues:
- Whether excise duty paid on explosives used in mines for manufacturing cement can be credited under the CENVAT scheme?

Analysis:
The appellant, a cement manufacturer, sought credit for excise duty paid on explosives used in mines for extracting raw material. The Excise Commissioner denied the credit, leading to an appeal before the Customs, Excise & Service Tax Appellate Tribunal. The Tribunal, following a previous Supreme Court judgment, rejected the claim. However, a recent Supreme Court ruling in Vikram Cement v. Commissioner of Central Excise, Indore overturned the earlier decision, allowing credit for duty paid on explosives used in mines for cement manufacturing.

The High Court, considering the new Supreme Court judgment, allowed the appeal and set aside the orders of the Tribunal and Assessing Authority. Consequently, the appellant was granted the right to avail credit for excise duty paid on explosives used in mines for cement manufacturing during the relevant period. No costs were awarded, and miscellaneous petitions in the appeal were also disposed of.