1997 (4) TMI 179 - AT - Central Excise

Summary

Issues:
1. Disallowance of Modvat credit based on purchase invoices from Satna Depot of Indian Oil Corporation.
2. Admissibility of Modvat credit on explosives used in mines for manufacturing cement.

Analysis:

1. The stay petition by M/s. Jaypee Rewa Cement raised two main issues. Firstly, the disallowance of Modvat credit based on purchase invoices from the Satna Depot of Indian Oil Corporation. The appellant argued that the lower authorities denied them Modvat credit because the Satna Depot was not registered with Central Excise. However, it was contended that Indian Oil Corporation, the manufacturer, was registered with the excise authorities for manufacturing and selling furnace oil. The Tribunal found that the invoices issued by the Depots of Indian Oil Corporation were valid duty paying documents as per Notification No. 32/94. Despite the explanation that invoices are documents issued by registered persons for sale of goods, it was established that Indian Oil Corporation was a registered person, allowing the Modvat credit to be rightfully taken by the appellants. Hence, the pre-deposit of duty was waived concerning furnace oil.

2. The second issue addressed whether Modvat credit was admissible on explosives used in mining limestone for cement manufacturing. The appellant referred to precedents, including the case of Indian Rayon and Industries Ltd., to support their claim that Modvat credit should be allowed. The Tribunal noted that this issue had been considered in various cases and agreed with the appellant's argument. Consequently, the pre-deposit of duty on explosives used in mining for cement production was also waived. As a result, the stay petition was allowed in favor of M/s. Jaypee Rewa Cement.

In conclusion, the Tribunal ruled in favor of the appellant on both issues, allowing the Modvat credit and dispensing with the pre-deposit of duty for both furnace oil and explosives used in mining for cement manufacturing.