COLLECTOR OF CENTRAL EXCISE Vs. ASSOCIATED CEMENT CO LTD
CUSTOMS EXCISE AND GOLD(CONTROL) APPELLATE TRIBUNAL
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K. Sankararaman, Member (T) -
(1.) THIS is a Reference Application by the Collector of Central Excise, Patna proposing that the following point of law may be referred to the Honourable High Court of Patna for their valued opinion, the said point arising out of the Order No. A7/CAL/91 dated 7th January, 1991 passed by this Tribunal on the appeal filed by M/s Associated, Cement Companies Ltd:
Whether the benefit of duty credit on input under Rule 57A of the Central Excise Rules, 1944, which is restricted to inputs for their use in a factory strictly in relation to manufacture of specified inputs can be extended to inputs used/completely consumed outside the factory i.e. in mines only save as otherwise in the manner as prescribed under Rule 57F(2) ibid.
(2.) Briefly stated, the facts of the case are as follows: M/s Associated Cement Companies Limited had filed an appeal to this Tribunal aggrieved with the decision of the Collector of Central Excise (Appeals), Calcutta holding that they were not eligible for the benefit of modvat credit under Rule 57A of the Central Excise Rules, 1944 in respect of a number of inputs claimed by them to be used in or in relation to the manufacture of their final product, cement. The appeal was partially allowed holding that explosives used in quarries for blasting and obtaining the mineral limestone which was brought to the factory for manufacture of cement were inputs eligible for the said modvat credit. The claim of the company that the said explosives were used in or in relation to the manufacture of cement was allowed subject to the condition that the use was by the appellant in their mines viz. if they are engaged in mining operations along with manufacturing operations. The benefit was confined to the explosives used for quarrying the mined products used in their factory for manufacture of cement.
The Collector of Central Excise, Patna is aggrieved with the above decision and has filed the present Reference Application. He has contended in the "Grounds for reference" that for availing the benefit under Rule 57A of the Central Excise Rules, 1944 the inputs should be used in relation to the manufacture of goods inside the factory (emphasis added). Section 2(c) of the Central Excises and Salt Act, 1944 has defined the factory as the premises and precincts thereof where excisable goods are manufactured. It has been contended by the Collector that the mines where the inputs in question namely explosives are used are not factory. Rule 57F(1) of the Central Excise Rules lays down that the inputs in respect of which credit has been allowed under Rule 57A may be used in, or in relation to, the manufacture of final products for which such inputs have been brought into the factory.
(3.) AS this is a question of law arising out of the order passed by the Tribunal, the following question is referred to the Honourable High Court of Patna, Ranchi Bench for their valued ruling:
Whether the Tribunal was right in allowing modvat credit under Rule 57A of the Central Excise Rules, read with Rule 57F(1) in respect of explosives used in mines for obtaining the minerals which are then used in their factory for manufacture of cement.;
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