Judgment:
1. These two appeals are filed by the Revenue as well as assessee M/s.
Birla Jute and Industries Ltd. M/s. Birla Jute and Industries Limited manufacture Cement Clinker and Cement falling under Chapter 25 of the Schedule to the Central Excise Tariff Act, 1985. They availed modvat credit during the month of November, 94 on certain items under Rules 57-Q of the Central Excise Rules, 1944 as Capital goods. However, proceedings were initiated against them which culminated in Deputy Commissioner of Central Excise, Raipur passing an order dated 22/23.4.96 in which he denied the modvat credit of Rs. 6,96,499.22 to the party under rule 57-U apart from imposing a penalty of Rs. 1,67,159-84 on them.
2. The party filed an appeal and the Commissioner (Appeals), Bhopal vide his order dated 17.2.2001 allowed the modvat credit on some items involving an amount of Rs. 1,15,693.77 but rejected their appeal relating to other items involving the credit of Rs. 4,17,717.45. The lower appellate authority also set aside the penalty imposed on the party.
3. The Revenue and M/s. Birla Jute and Industries Ltd., both are in appeal against the above said order of the Commissioner (Appeals) in respect of the parts of the order held adversely against each one of them. The Revenue are in appeal in respect of the following items involving a total modvat of Rs. 1,15,693.77:-Sr. No. Particular of goods.
Sr. No. in the S.C.N.(i) Electrical Spares (Relays: 85.36).
23(ii) Degital Monitor.
30(ii) Cables/Wires (85.44).
31,32(iv) Super Enamelled Copper Wire (85.44).
39,47(v) Switch (cord) Board (85.37).
40(v Fuse (85.36).
41(vii) Castables (38.16).
28,34,29(viii) Explosives (36.02).
33,48 4. The party is in appeal against the part of the order which denies them the modvat credit totally amounting to Rs. 4,17,717.45 in respect of the following items:- 5. Shri Sanjay Grover, Advocate appearing for the Assessee M/s Birla Jute & Industries Ltd., very fairly submits that in view of the fact that availability of modvat credit on the item explosives is covered against them in the case of M/s. J.P. Rewa Cement Vs. C.C.E., Raipur - 2000(119) ELT-552(T-LB). However, he wishes to press the claim of his client in respect of the other items under consideration. Shri Swatantar Kumar, JDR reiterates the arguments contained in the written memo of appeal filed by the Revenue.
6. I have considered the submissions made by both the sides. It is observed that the matter relating to modvat credit on Capital goods now stands amply clarified by the decision of the Larger Bench of the CEGAT in the case of CCE., Indore Vs. Surya Roshni -2000(128) ELT-293.
(Tribunal-LB). This issue is further dealt in extenso in the judgment of Madras High Court in Siv Industries -2001(129) ELT-48(Madras). In view of the ratio of these decisions, therefore, it is considered appropriate that the matter is remanded to the original authority for reconsideration and for passing a fresh order in the light of the guidelines laid down on the subject in these decisions. Accordingly but for the item 'Explosives' -the matter in respect of the other items in appeal in both the appeals is remanded to the original authority by setting aside the order passed by the Commissioner(Appeals) for reconsideration and passing a fresh order in the light of the above observations. In respect of the explosives the appeal of the Revenue is, allowed in view of the Larger Bench decision of the CEGAT in the case of M/s. J.P. Rewa Cement cited supra.
7. The assessee shall be afforded a reasonable opportunity of hearing before taking a final view in the matter.