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TMI Blog2013 (8) TMI 503X X X X Extracts X X X X X X X X Extracts X X X X ..... ning limestone and using such limestone to manufacture cement, though the explosives were not brought within the factory, the manufacturer by virtue of rule 57-A read with Rule 57-J was entitled to MODVAT credit in respect of duty paid on the input - the explosives for blasting mines to produce limestone for use in manufacture of cement/clinkers in factory situated at some distance away from mines, MODVAT cannot be denied on the ground that they were not used as inputs within factory – Decided in favor of assesse. - C.E.S.R.No.16/2001 - - - Dated:- 25-4-2013 - Krishn Kumar Lahoti And M. A. Siddiqui Acting CJ,JJ. For the Appellant : Shri Anoop Nair For the Respondent : Shri Aditya Adhikari ORDER This reference has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e explosive was used outside the factory premises for blasting lime stone it was considered as inputs eligible for MODVAT. He has placed reliance to two judgments of the Apex Court in support of his contention in the case of Jaypee Rewa Cement Vs. Commissioner of Central Excise, M.P. [(2001) 8 SCC 586] and Vikram Cement Vs. Commissioner of Central Excise, Indore [2006 (194) E.L.T. 3 (S.C.)] and submitted that the aforesaid question deserves to be answered in favour of respondent. To appreciate rival contention of the parties, it would be appropriate if Rule 57-A of the Rules, is referred, which reads thus :- Rule 57A. Applicability - (1) The provisions of this section shall apply to such finished excisable goods (hereinafter referred t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which any exemption to the extent of the duty of excise payable on the value of the packaging materials is being availed of for packaging any final products; (iii) packaging materials the cost of which is not included or had not been included during the preceding financial year in the assessable value of the final products under section 4 of the Act; (iv) cylinders for packing gases; (v) plywood for Tea, [chests; or] (vi) bags or sacks made out of fabric (whether or not coated, covered or laminated with any other material) woven from strips or tapes of plastics. The question whether the explosives used within the factory premises was eligible for MODVAT or the explosives used in the mines was eligible for MODVAT credit has been c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t referred to the provisions of Rule 57J, the opening portion of which makes it clear that the said Rule will be applicable notwithstanding anything contained in the other Rules. According to Rule 57J, when the Central Government by notification specified the inputs used in the manufacture of intermediate products received by the manufacturer for use in or in relation to the manufacture of final product, then all such products on which duty has been paid credit will be allowed. Pursuant to this Rule 57J, notification was issued on 20th June, 1986 which was amended from time to time. The relevant part of the notification is as follows:- S. No. Description of inputs Description of intermediate products Description ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v) high-speed diesel oil classifiable under Heading 27.10 of the Schedule to the said Act. (iv) high-speed diesel oil classifiable under Heading 27.10 of the Schedule to the said Act. 13. Explosives would fall under column (2) being a tariff item in Chapter 36; the intermediate product, namely, limestone would fall under column 3 being covered by Chapter 25; and the final product, namely, cement would also fall under Chapter 25 and would fall under column 4. The reading of Rule 57-J alongwith the aforesaid notification can leave no manner of doubt that even in respect of inputs used in the manufacture of intermediate product which product is then used for the manufacture of a final product, the manufacturer would be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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