N.N.MATHUR, J. - (1.) WE have heard Mr. N.M. Lodha, learned Counsel for the Revenue and Mr. Rajendra Mehta, learned Counsel for the respondent assessee.
(2.) THIS reference has been made at the instance of the Revenue for the opinion of this Court on the following questions of law : - 'Whether the Ammonium Nitrate and Fuel Oil (ANFO) used as explosive in mines for obtaining the limestone, which is then used in the factory for the manufacture of cement, can be considered as 'inputs' eligible for Modvat credit in terms of Rule 57A of Central Excise Rules, 1944.' The respondent -assessee M/s. Shree Cements Ltd. is said to be engaged in manufacturing of cement. They were using explosives for blasting mines. It appears from the statement of the case that a particular type of explosive is used for blasting the querries using Ammonium Nitrate and Fuel Oil (ANFO). The department took the view that mining of lime stone is not an integrated part of the process of manufacturing cement and hence explosives cannot be held as inputs in or in relation to the manufacturing of cement. The Tribunal by order dated 21 -5 -1997 held that duty on ANFO will be admissible to the appellants under Modvat scheme.
(3.) IT is submitted by the learned Counsel that the controversy raised has been concluded by the decision of the Apex Court in Jaypee Rewa Cement v. Commissioner of Central Excise, M.P. reported in [2001 (133) E.L.T. 3 (S.C.) = JT 2001 (7) SC 261]. The Apex Court considering the Rule 57A(1) of the Central Excise Rules found that the said rule does not in any way specify that the inputs have to be utilised within the factory premises. Dealing with Rule 57J the Court expressed that even in respect of inputs used in the manufacture of intermediate product which product is then used for the manufacture of the final product, the manufacturer would be allowed credit on theduty paid in respect of the input. The Court concluded : - 'Thus, on the explosives a duty had been paid and the appellants would be entitled to claim credit because the explosives were used for the manufacture of the intermediate product, namely limestone which, in turn, was used for the manufacture of cement' ;