Singh, C.J.
1. Reference has been made to us by the Customs, Excise and Gold (Control) Appellate Tribunal, New Delhi, under Section 35G(1) of the Central Excise Act, to consider the following question of law:
'Whether the explosive used in the respondents' mines situated outside the premises of their cement factory, for the purpose of excavating limestone as raw material for manufacture of cement, can be considered as inputs (as used in relation to the manufacture of cement) eligible for Modvat credit in terms of Rule 57A of the Central Excise Rules, 1944'.
2. The facts giving rise to the Reference are as follows:
3. The respondent company manufactures cement in it's factory located in Udaipur. One of the raw materials for manufacture of cement is Limestone. The respondent obtained Limestone from mines owned by it. It used duty paid explosives to extract Limestone from the mines. It is not disputed that the Limestone so extracted was exempt from payment of excise duty by reason of exemption notification. The respondent claimed that in manufacture of cement, it had used explosives which were inputs and in respect of which notification had been issued by the Central Government. The respondent claimed Modvat credit under Rule 57A of the Central Excise Rules, 1944.
4. The Assistant Commissioner disallowed the credit on the ground that the mining area was situated outside the factory and therefore, the explosives did not qualify for the credit. This order of the Assistant Commissioner was sustained by the Commissioner (Appeals).
5. Thereafter, the respondent preferred an appeal to the Customs, Excise and Gold (Control) Appellate Tribunal, New Delhi. The Tribunal, relying upon a decision rendered in the case of Associated Cement Co. Ltd. v. C.C.E. (1), allowed the appeal. The Tribunal, while allowing the appeal, held that the explosives used in mining operation in the mines which were owned by the Assessee would qualify to be inputs under Rule 57A of the Central Excise Rules, 1944.
6. Aggrieved by the order passed by the Tribunal, an application was moved to the Tribunal to refer the question of law to this Court. The question as already noticed was referred to this Court by order dated 3.1.2002.
7. We have heard learned counsel for the Revenue. The instant case is covered by the decision of the Supreme Court in Jaypee Rewa Cement v. Commissioner of Central Excise, M.P. (2), The facts of that case are similar to the facts of the instant case. In Jaypee Rewa Cement's case (supra), the appellant used Limestone as raw material for manufacture of cement in its factory. It used duty paid explosives to extract Limestone from the mines, the Assessee claimed Modvat credit under Rule 57A of the Central Excise Rules on the ground that the explosives used in the mining operations were inputs. The Supreme Court upheld the contention of the Assessee and while disposing of the appeal, held as follows:
'10. Reading of Rule 57-A clearly shows that the notification is to specify the goods used in or in relation to the manufacture of the final product, whether directly or indirectly. In the present case, inputs which are used in relation to the manufacture even directly would be regarded as an input for the purpose of Rule 57A. Sub-rule (1) of Rule 57-A does not, in any way, specify that the inputs have to be utilised within the factory premises. The Explanation contained in Rule 57-A is merely meant to enlarge the meaning of the word 'input' and does not in any way restrict the use of the input within the factory premises nor does the said Rule 57-A require the inputs to be brought into the factory premises at any point of time.'
8. Having regard to the aforesaid judgment of the Supreme Court, the aforesaid question of law referred to us is answered in the affirmative. Thus, the duty paid explosives used for excavating Limestone from mines is held to be an 'input' to qualify for Modvat credit.
9. The reference is accordingly disposed of.