2000 (7) TMI 150 - AT - Central Excise

Summary

Issues:
1. Modvat credit eligibility for explosives used in mine operations.
2. Modvat credit eligibility for spares, components, and accessories received before 1-3-1994.

Issue 1: Modvat credit eligibility for explosives used in mine operations.
The appeal E/1810/98 pertained to Modvat credit for explosives used in mine operations. The Commissioner (Appeals) had granted the benefit of Modvat credit based on a previous judgment in the case of Jaypee Rewa Cement. However, the Larger Bench of the Tribunal later reversed this decision, holding that mines do not form part of the factory and explosives used in mines are not eligible for Modvat credit. Consequently, the Tribunal set aside the impugned order and allowed the appeal, following the ratio of the Larger Bench decision.

Issue 2: Modvat credit eligibility for spares, components, and accessories received before 1-3-1994.
Appeals E/1809 & 1733/98 raised the issue of Modvat credit eligibility for spares, components, and accessories received before 1-3-1994. The appellants claimed Modvat credit for items used in machinery bought before the specified date. The Commissioner noted previous orders and trade notices supporting the eligibility of Modvat credit in such cases. The Revenue contested the appeal, arguing that the Commissioner's order and the trade notice were contrary to Rule 57Q. However, the Tribunal found no specific provision to deny the benefit of Modvat credit in this scenario. It upheld the Commissioner's order based on the previous decision in the case of Coastal Paper Mills and the trade notice, as there was no contradictory judgment from the Tribunal on this issue.

In conclusion, the Tribunal rejected the Revenue's appeals related to both issues, affirming the eligibility of Modvat credit for explosives used in mine operations based on the Larger Bench decision and for spares, components, and accessories received before 1-3-1994 following the Commissioner's order and trade notice.