2012 (8) TMI 840 - AT - Central Excise

Cenvat Credit Capital Goods Mines if captive mines so as to constitute one integrated unit with concerned cement factory, Cenvat/Modvat credit available - Held that - There is no dispute about the fact that Maihar Cement as also Maihar Cement Unit No. 2 are two units of the same parent company, i.e., M/s. Century Textile & Industries Ltd. and do not have the status of independent legal persons. It is also clarified by the ld. Advocate that though accounting of the two units is separate but a common balance sheet is being prepared. As such the mines which were allotted to Maihar Cement at the time of its incorporation and subsequently allowed to be used by the second entity, i.e., Maihar Cement Unit No. 2 has to be treated as captive mines for both the units - as the mines in question are not supplying to factory of other assessees - Following decision of the case of Madras Cement 2010 (7) TMI 179 - SUPREME COURT - Decided in favour of assessee.

Summary

Issues:
Entitlement to credit of duty paid on stone crushers and parts used in mines for crushing limestone and transportation to factory.

Analysis:
The central issue in this appeal was whether the appellant is entitled to credit of duty paid on stone crushers and their parts used in the mines for crushing limestone and transporting it to the factory. The lower authorities had denied the credit, citing that the mines were not captive mines of the appellant. The Commissioner (Appeals) noted that both the mines served Maihar Cement and Maihar Cement Unit No. 2, the appellant, and concluded that the mines were captive mines of Maihar Cement, not of Maihar Cement Unit No. 2. The appellant argued that despite separate registration with the central excise authorities, both units belonged to the same parent company and should be treated as one entity under the law. It was clarified that the mines exclusively served both units, and no crushed limestone was supplied to any outside unit, justifying the appellant's entitlement to credit.

The Tribunal found that the dispute revolved around whether the mines were captive mines of Maihar Cement Unit No. 2. The lower authorities' emphasis on separate registration under the Central Excise law was deemed irrelevant in determining the status of the units. It was established that both Maihar Cement and Maihar Cement Unit No. 2 were units of the same parent company, sharing a common balance sheet, and lacking independent legal status. Consequently, the mines allocated to Maihar Cement and subsequently used by Maihar Cement Unit No. 2 were considered captive mines for both units, aligning with the legal precedent set by the Supreme Court in the Vikram Cement case.

Additionally, the Tribunal referenced a prior decision concerning Maihar Cement allowing credit for cement items and highlighted the Supreme Court's ruling in the Madras Cement case, supporting the appellant's position since the mines did not supply to other assesses' factories. Considering the arguments and legal precedents, the Tribunal set aside the lower order, allowing the appeal and granting consequential relief to the appellant.