2003 (8) TMI 140 - AT - Central Excise

Summary

Issues:
Availability of Cenvat credit for duty paid on inputs used outside factory premises.

Analysis:
The Appeal filed by M/s. Manglam Cement Ltd. questioned the availability of Cenvat credit for duty paid on inputs used outside the factory premises. The Appellants argued that the inputs used in their mines should be eligible for Cenvat credit based on the Supreme Court's decision in a similar case. They contended that the definition of inputs in the Cenvat Credit Rules did not restrict the use of inputs outside the factory. The Appellate Tribunal had previously upheld similar arguments in other cases.

In response, the Departmental Representative highlighted that the definition of inputs in the Cenvat Credit Rules clearly stated that goods must be used within the factory of production to qualify as inputs. This interpretation was supported by a circular issued by the Board. The Tribunal analyzed the definition of inputs in the Cenvat Credit Rules, emphasizing that goods must be used within the factory of production to be considered inputs. The Tribunal rejected the argument that this requirement only applied to certain types of goods like lubricating oil and greases. The Tribunal distinguished the present case from the Supreme Court's decision in a previous case, noting that the rule interpreted by the Supreme Court did not contain the specific requirement of being used within the factory of production. With the change in the definition of inputs under the Cenvat Credit Rules, which included the phrase 'within the factory of production,' the Tribunal concluded that the earlier Supreme Court judgment was not applicable. Consequently, the Appeal was dismissed concerning the disallowance of the Modvat credit, while the penalty was set aside due to the interpretational nature of the issue.