1. All these four appeals and stay applications are taken up together for disposal as per law, as the issue lies in a short compass. The Commissioner has dismissed the appeals by holding that appellants were not entitled to Modvat credit on explosives used for excavating the limestone in the mines situated outside the factory. He has noted that the issue is covered by the judgment of 5 Member judgment of the Tribunal rendered in the case of M/s. Jaypee Rewa Cements, Rewa v. CCE Raipur 2000 (38) RLT 1111/CEGAT-L.B. wherein it has been held as under: The process of manufacture of cement did not extend beyond the bounds of the cement factory as registered with the Central Excise Department under Rule 174 and that the mining activity outside the factory, being an activity for procurement of a raw material (lime stone), was only a process anterior to the commencement of the process of manufacture of cement and therefore, did not form part of the manufacture". The Hon'ble CEGAT further held that the explosives used for quarrying limestone in mines situated away from the cement factory cannot be held to be "goods used in or in relation to the manufacture of cement" and consequently would not qualify to be "inputs" for the Modvat credit under Rule 57A of the Central Excise Rules, 1944.
The above observation has been quoted by the Commissioner in his order and following the judicial discipline, he has applied the ratio and dismissed the appeal.
2. Ld. Consultant Shri Chidananda Rao submits that the issue has been admitted in the Apex Court and the matter is also under Reference before the respective High Courts. Therefore, he seeks for grant of waiver, or in the alternative, put them on condition of 50% pre-deposit so that the matter can be kept pending till such time as the Apex Court or the Reference matter is decided by the respective High Courts. He also submits that Commissioner ought to have heard them in the matter before deciding the issue ex parte and it is violate [violation] of principles of natural justice.
3. Ld. D.R. Shri S. Kannan submits that the issue has been fully decided by the Larger Bench of Five Members of the Tribunal holding that Modvat credit cannot be extended to explosives used in excavating the limestone in the mines situated outside the factory. He further points out that a similar view has been taken with regard to the dumpers which have been used outside the factory in the case of Madras Cements Ltd. . Therefore, any item which is used outside the factory cannot be eligible to the benefit of Modvat credit and the issue being fully settled, cannot be challenged on the grounds raised by the Ld. Consultant. He submits that the appeals are required to be dismissed by following the ratio and no better purpose would be served in granting waiver or keeping the matter pending. He submits that once the issue is decided in the Revenue's favour, question of even granting waiver of pre-deposit does not arise and the order of the Tribunal is binding on all Co-ordinate benches.
4. On a careful consideration of the submission, we totally agree with the Ld. DR that the issue is fully decided by the Tribunal judgments of Larger Bench. In this particular case, the explosives have been used in mines located outside the factory. Once an item has been used outside the factory, consistently the Tribunal has taken a view that the assessee cannot claim the benefit of Modvat credit. The Order-in- Original of the Assistant Commissioner also noted large number of judgments in this regard which are all in favour of the Revenue. At this stage, Ld. Consultant interrupts and submits that the mines were all located inside the factory. We are not in a position to appreciate this interruption and also we notice that this issue was not the point raised before either of the authorities. No documents have been produced. Neither approved plan has been produced to show that the mines were located inside the factory. Mines are governed by the Mines Act whereas the factories are registered under the Factories Act. The submissions made is totally unsustainable, as their submissions were duly considered by the Commissioner and by following the Larger Bench judgment he rejected the appeals. Hence, there cannot be any doubt in the matter that the explosives were used in mines located outside the factory and the Larger Bench judgment is binding on Co-ordinate benches. Therefore, by rejecting the stay applications, the appeals are taken up and respectfully following the ratio of the Tribunal, all the four appeals are dismissed.