9911796707
TMI Blog1999 (12) TMI 454X X X X Extracts X X X X X X X X Extracts X X X X ..... the factory of the appellants, (4) that the Department, therefore, proposed to dis-allow the above Modvat credit and recover the amount under Rule 57U of the Central Excise Rules and to penalise the party under Rule 173Q of the Rules ibid for alleged contravention of the Modvat rules, (5) that the appellants contested the proposed action of the Department by way of their reply to the show cause notice, (6) that the jurisdictional Assistant Commissioner of Central Excise adjudicated the dispute and confirmed the demand of duty of Rs. 1,68,699/- against the party and imposed a penalty of Rs. 2 lakhs on them and (7) that in the appeal filed against this order of adjudication, by the appellants, the Commissioner of Central Excise (Appeals) upheld the A.C.'s order regarding the Modvat credit; The Commissioner, however, set aside the penalty after finding that the same was beyond the scope of the show-cause notice. 2. The present appeal filed by the appellants is against the above order of the Commissioner (Appeals) upholding the adjudicating authority's order confirming the demand of duty as aforesaid. 3. I have carefully examined the orders of both the lower authorities and connect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder disallowing the Modvat credit. 4. I have heard the learned Advocate Shri R. Santhanam for the appellants and learned JDR Shri D.K. Nayyar for the respondent-Revenue. The learned Advocate has reiterated the grounds of appeal and has submitted that the process of manufacture of sugar starts from procurement of sugarcane at the cane purchase centres and therefore, such centres should be considered as part and parcel of the factory premises. In support of this contention, the learned Advocate has cited the decision of the Hon'ble Patna High Court in the case of Rameswar Jute Mills Ltd. (supra) and also the decision of the Tribunal in the case of Cothas K. Prakash (supra). He has further placed reliance on the decision of the Tribunal in the case of Associated Cement Co. Ltd. v. CCE reported in 1991 (55) E.L.T. 415 (T), in support of his argument that the weighment of sugarcanes at the cane purchase centres is an integral part of the process of manufacture of sugar in the appellants' factory. Drawing support from the afore-cited decisions, the learned Advocate submits that the weigh bridges should be considered to have been installed in the factory premises and to have been used ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of Rameswar Jute Mills Ltd. (supra) wherein the question had arisen for determination as to what was the stage at which cess was required to be levied on the petitioner under the Industries (Development Regulation) Act, 1951. The word 'factory' as defined under Section 3(c) of the said Act had arisen for consideration of the Hon'ble High Court while determining the above question. The said definition (text of which is seen extracted in para 4 of the High Court's judgement) reads as follows :- factory' means any premises, including the precincts thereof, in any part of which a manufacturing process is being carried on or is ordinarily so carried on - (i) with the aid of power, provided that fifty or more workers are working or were working thereon on any day of the preceding twelve months; or (ii) without the aid of power, provided that one hundred or more workers are working or were working thereon on any day of the preceding twelve months and provided further that in no part of such premises any manufacturing process is being carried on with the aid of power . 8. After considering the above definition, the Hon'ble High Court proceeded to observe, in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Allahabad High Court reported in 1972 Allahabad Weekly Reporter 498 and the decision of the Punjab High Court in the case of Dharampal Agarwal v. E.S.I. Corporation reported in 31 FJR 82. This Tribunal restated the principle of these High Courts' decisions thus :- a factory would be normally in one premises, including the precincts, or in different places within one compound, but that there may be cases where the owner may run the factory in units located at different places provided it is found that the work carried on in all these different buildings at different places is interconnected and conducted by the same person and the manufacture would not be complete in the absence of work in any of the units. 12. Accepting the said principle but distinguishing the case of Cothas K. Prakash (supra) from the cases before the High Courts, the Tribunal held that the case before it was not one whether one part of the manufacturing activity was carried out in one place and the other part or parts were carried out in one or more other places so as to constitute all the said places together into a factory in the light of the High Court decisions cited earlier. In the case before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le inputs are not only goods used in the manufacture of final products but also those used in relation to the manufacture. The mining of the minerals used in the manufacture is in relation to the latter and in view of the observations of the Supreme Court treating the two operations carried on by the same person as integrated process, goods which are otherwise eligible for modvat benefit would be entitled to said benefit even if used in the mining operation carried on by the manufacturer in relation and as a prelude to such manufacturing operations. 14. From the above, it is quite apparent that the goods involved were used for mining of minerals used in the manufacture of cement and accordingly, the goods were held to be used in relation to the process of manufacture and hence, held to be eligible inputs for the purpose of Modvat credit under Rule 57A of the Central Excise Rules. The goods in the instant case are weigh bridges claimed to be 'capital goods' eligible for the Modvat credit under Rule 57Q of the Central Excise Rules. In order that such goods should be eligible for the Modvat credit as capital goods, the same should be used in the manufacture of sugar by the appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
