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TMI Blog2002 (7) TMI 169X X X X Extracts X X X X X X X X Extracts X X X X ..... ith scrapper and conveyor etc., as capital goods under Rule 57Q of the Central Excise Rules, 1944. These items were however used in the mines. They had also availed Modvat credit of Rs. 25,68,802/- on the capital goods viz., components for belt conveyor, and rubber conveyor belt which were used to carry limestone from their mines to the factory premises. It was alleged that the mines were not in the name of the assessee; that as such these goods did not appear to be covered under the definition of 'capital goods' as defined in Rule 57Q(1) which reads as follows : "The provisions of this section shall apply to finished excisable goods of description specified in the Annexure below (hereinafter referred to as the final products) for the pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lants has relied on a number of decisions passed by the Tribunal in support of his contention that the Modvat credit on the capital goods used in the mines under Rule 57Q of the Central Excise Rules, 1944 is admissible. But since however, there is a direct and recent judgment of the Hon'ble Supreme Court on the issue, we need not look into the other decisions. The Hon'ble Supreme Court in their judgment in the case of M/s. Jaypee Rewa Cement - 2001 (133) E.L.T. 3 (S.C.) while considering the availability of Modvat credit on the explosives as an input under the provisions of Rule 57A of Central Excise Rules, 1944 have observed as follows : '10. Reading of Rule 57A clearly shows that the notification is to specify the goods used in or in re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n area which is adjacent to the factory i.e., in an area which can be called as precincts of the factory in terms of Section 2(e) of the Central Excise Act, 1944 and are being used in connection with the manufacture of final product. Thus, they are eligible for Modvat credit under Rule 57Q. The Original Authority relying on the judgment of the Supreme Court in the case of M/s. Grauer Well (India) Ltd. v. C.C.E., Baroda - 1994 (74) E.L.T. 481 (S.C.) has observed in his order that what would constitute a factory and the precincts thereof is to be determined in terms of the definition of this term in Section 2(e) of the Central Excise Act, 1944 and not what is included by a manufacturer in his site plan. He has analysed this point in detail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en up for crushing for desired use in the cement mill. Therefore, the process of mining carried out could not be taken to be encompassed as for the manufacture of cement. Since the question of Modvat credit has to be related to a unit, which are carried out with a view to generate the raw material, unless the generation is connected to the process of manufacture of the commodity, it cannot be taken to be integral to the process of manufacture of the notified finished product. In the above view of the matter, the benefit of the Modvat credit as claimed has to be denied.' 8. The appellants are also relying on the decision of the Tribunal in the case of C.C.E., Chennai v. Pepsico India Holdings Ltd. - 2001 (130) E.L.T. 193 (T) = 2001 (42) RL ..... X X X X Extracts X X X X X X X X Extracts X X X X
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