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TMI Blog2019 (1) TMI 902X X X X Extracts X X X X X X X X Extracts X X X X ..... relation, though indirectly, with the extraction of ore thus it qualifies for input as defined under Rule 2(k), prevailing during the relevant period. Without filling of the ore pits the appellant was statutorily, not in position to extract the ore, i.e. the final product thus, the use of cement was very much in relation to the manufacture, which was extraction of ore - the appellant is entitled to treat the same as input. Thus, the adjudicating authority below has committed an error while denying the credit on cement used by appellant in filling pits for making area fit for ore extraction - credit allowed - appeal allowed - decided in favor of appellant. - E/50876/2018-EX [SM], E/50986/2018-EX [SM] - Final ORDER NO. 53452-53453/2018 - Dated:- 30-11-2018 - MRS. RACHNA GUPTA, MEMBER (JUDICIAL) Present for the Appellant: Mr. Anurag Kapur, Advocates Present for the Respondent: Ms. Tamanna Alam, D.R. ORDER PER: RACHNA GUPTA The Appellant is engaged, inter alia, in the manufacture of Lead and Zinc Concentrates, falling under Chapter 26 of the First Schedule to the Central Excise Tariff Act, 1985, and is also availing Cenvat credit on various input ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 593 (Tri.-Delhi) and decision in Appellant s own case, the Hon ble Tribunal vide Final Order No. 56292/2017 dated 14.08.2017 Final Order No. 57168/2017 dated 13.10.2017 8. Ld. DR while justifying the order has prayed for dismissal of appeal. 9. After hearing both sides the findings are as follows:- To decide the impugned controversy definition of input is relevant:- Section 2 (k) [(k) input means (i) all goods used in the factory by the manufacturer of the final product; or (ii) (ii) any goods including accessories, cleared along with the final product, the value of which is included in the value of the final product and goods used for providing free warranty for final products; or (iii) all goods used for generation of electricity or steam [or pumping of water] for captive use; or (iv) all goods used for providing any [output service, or]; (v) [all capital goods which have a value upto ten thousand rupees per piece.] but excludes (A) light diesel oil, high speed diesel oil or motor spirit, commonly known as petrol; (B) any goods used for (a) construction of a building or a civil structure or a part thereof; or (b) laying of founda ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the method of extraction shall be by VRM Stopping method post filled by mill failing mixed with cement in the ratio as prescribed therein. The permission specifically recites that extraction of ore from the proposed area shall be commenced only after proper settlement and consolidation of the fill of stopped out ore block, immediately below the proposed ore block. Perusal of these clauses in the permission by the mines department in favour of the appellant makes it abundantly clear that filling of the open ore pits with cement was a mandatory prerequisite for the appellant to extract ore. As already observed above it was a statutory requirement as well in view of the regulation 107 (3). 13. Further, it has been the settled law that: all goods used in the factory of the manufacturer of final product, other than the goods itemized in the excluded category mentioned therein, are eligible for consideration as input for the purpose of taking Cenvat credit. Thus, an assessee only needs to prove that the goods were received in the factory and that the same are not covered by any of the exclusions, since the definition of input is very wide intending to take within its ambit all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... product. The first of the items is Hydrochloric Acid (HCL). According to the department, HCL was used to treat the effluent which was a wastage obtained and hence it was not used in or in relation to the manufacturing process. This issue is no longer res integra as it has already been considered by the Supreme Court in the case of Indian Farmers Fertiliser Co-operative Ltd. v. C.C.E., Ahmadabad, 1996 (86) E.L.T. 177 (S.C) = AIR 1996 SC 2542. In that case raw naptha was obtained at the concessional rate and used for producing ammonia which in turn was used partly, directly in the urea plant and partly, indirectly in the production of urea by being employed in off-site plants, namely, water treatment plant, steam generation plant, inert gas generation plant and effluent treatment plant, all of which were part of the integral process of the manufacture of urea. After taking into consideration the earlier judgment in the case of C.C.E., Calcutta-II v. M/s. Eastend Paper Industries Ltd. AIR 1990 SC 1893, J.K. Cotton Spinning and Weaving Mills Co. Ltd. v. Sales Tax Officer, Kanpur, AIR 1965 SC 1310, C.C.E., New Delhi v. M/s. Ballarpur Industries Ltd.- 1989 (43) E.L.T. 804 (S.C.) = AIR 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods [Rule 2(d)]. Taxable services whose part of value is exempted on the condition that no credit of inputs and input services, used for providing such taxable service, shall be taken, are exempted services [Rule 2(e)]. Hence credit of capital goods used exclusively in manufacture of such goods or in providing such service is not allowed. 2. How is the no relationship whatsoever with the manufacture of a final product to be determined? Credit of all goods used in the factory is allowed except in so far as it is specifically denied. The expression no relationship whatsoever with the manufacture of a final product must be interpreted and applied strictly and not loosely. The expression does not include any goods used in or in relation to the manufacture of final products whether directly or indirectly and whether contained in the final product or not. Only credit of goods used in the factory but having absolutely no relationship with the manufacture of final product is not allowed. Goods such as furniture and stationary used in an office within the factory are goods used in the factory and are used in relation to the manufact ..... X X X X Extracts X X X X X X X X Extracts X X X X
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