2005 (8) TMI 700 - AT - Central Excise

Summary

Issues:
1. Modvat credit eligibility for explosives used in mines.
2. Applicability of previous judgments on Modvat credit.
3. Imposition of penalty.

Analysis:
1. Modvat Credit Eligibility: The appellants claimed Modvat credit for explosives used in mines. The Commissioner (Appeals) relied on the Apex Court judgment in Jaypee Rewa Cements v. CCE to deny the Modvat credit. The Tribunal reconsidered the issue and disagreed with the assessees' contention that mines are part of the factory, citing the Apex Court judgment in CCE v. J.K. Udaipur Udyog Ltd. The Tribunal held that the assessee is not eligible for Modvat credit for explosives used in mines.

2. Applicability of Previous Judgments: The Tribunal considered previous rulings in cases like M/s. Haryana Roadways Engineering Corporation Ltd. and M/s. Bilwara Spinners Ltd. to refrain from imposing a penalty. The Tribunal also referenced the Apex Court judgment in CCE v. J.K. Udaipur Udyog Ltd., which established that explosives used in mines are not eligible for Modvat credit. The Tribunal, after careful consideration, found that this issue is settled based on the Apex Court's decision and previous judgments, leading to the rejection of the appeals.

3. Imposition of Penalty: Despite the absence of the respondents, the learned SDR submitted that the issue is covered, allowing the appeals to proceed. The Tribunal, after considering the arguments and legal precedents, rejected the appeals, concluding that there is no merit in the appellants' claims for Modvat credit for explosives used in mines. The Tribunal pronounced the operative portion of the order in open court upon the conclusion of the hearing.