2001 (7) TMI 535

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..... apital goods used in or in relation to the manufacture of cement. On scrutiny of the records, the Central Excise Authorities observed that Modvat credit amounting to Rs. 1,09,312/- availed by the appellants during the period September and October, 1998 was not admissible to the appellants. A SCN was issued to the appellants asking them to explain as to why Modvat credit should not be disallowed, why penalty should not be imposed on them and why the interest should not be charged. The main objection of the department was that the items were used in the mining area. 3. Shri B.L. Narsimhan, ld. Advocate, appears for the appellants submits that in this case, the appellants are engaged in the mining operation as also in processing of cement; t .....

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..... ubmits that the case of Vikas Industrial Gas - 2000 (118) E.L.T. 257 pertained to the credit under Rule 57Q. He submits that the larger bench in the case of Jaypee Rewa Cement [2000 (119) E.L.T. 552] relied on the decision of this Tribunal in the case of Vikas Idustrial Gas cited above. He submits that in the case of Japyee Rewa Cement, this Tribunal also relied on the decision of Madras Cement Limited [1998 (99) E.L.T. 395]. In the case of Madras Cement Limited, this Tribunal held that 5....the areas which are relatable to the activity of the manufacture of the cement will alone be taken to be covered under the definition of cement (sic.). For that purpose, we have to consider as to where the manufacturing process starts and where it ends .....

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..... in it has been decided that the explosives used in the mining area will not be eligible for Modvat credit. He submits that presently the licences are not issued under Rule 174 and only registration is undertaken. He, therefore, submits that in view of the fact of the Larger Bench decision in the case of Jaypee Rewa Cement, the appellants have no case and prays that the appeal may be rejected. 7. I have heard the rival submissions. I have perused the case law cited by both sides. I note that the contention of the appellants is based on two main grounds. The first ground is blow bar and breaker bar are used in the manufacture of cement and the second ground is that the mining area is factory for the purpose of Section 2(e) inasmuch as the .....

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