M/S Panyam Cements and Minerals Vs. Commissioner of Central Excise, - Court Judgment

Excerpt:
1. the stay application and appeal is taken up together for disposal as per flaw in view of the fact that the commissioner (appeals) in the impugned order has followed the larger bench of a 5 member judgment of cegat in the case of jaypee rewa cement, rewa vs. cce, raipur as reported in 2000 (38) rlt 1111 (cegat-lb). the finding recorded by the commissioner in para 5 to 7 are noted: "the issue involved in the instant appeal is regarding admissibility of the modvat credit under rule 57a of the central excise rule, 1944 on explosives used for excavating the lime stone in the mines situated outside the factory. i find that this issue has been extensively dealt with by the 5 member bench of the hon'ble cegat in the case of m/s. jaypee rewa cement. rewa vs. cce, raipur - (2000 (38) rlt 1111 (cegat-lb)) in which 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 lime stone 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 quality to be "inputs" for the modvat credit under rule 57a of the central excise rules, 1944. respectfully following the ratio of the above decision of the hon'ble cegat, by which i am bound as a matter of judicial discipline, i hold that the modvat credit on the explosives used in the mines for quarrying the lime stone is not admissible to the appellants under rule 57a of the ce rules, 1944. the assistant commissioner's order disallowing the modvat credit on explosives is upheld." 2. shri m. ramanjaneyulu, asstt. accountant appeared for the appellant factory and requested for adjournment of the matter of enable his advocate to argue the case. ld. dr shri a. jayachandran opposed the prayer and submits that all the similar stay applications and appeals arising from similar order have been disposed off by confirming the impugned order. he submits that the ratio of the larger bench judgment squarely applies to the present case. there is no stay granted by the apex court and hence the stay application and appeal is required to be rejected without grant of adjournment as there is no case for keeping the matter pending.3. on a careful consideration of the submissions, we notice that the issue has attained finality buy the judgment rendered by a 5 member larger bench. they have clearly taken a view that explosives used outside the factory and in the mines cannot be considered as "inputs" for granting modvat credit under rule 57(a) of ce rules. the appellants in their appeal did not contest this fact of the use of explosives and explosive preparations in the mines for placing of lime stone yet they have claimed modvat credit on he basis of the earlier judgment of the tribunal. those judgment have been over ruled by the large bench and therefore question of applying those judgments does not arise. the point raised is that the matter is pending in reference before the hon'ble high court of andhra pradesh. this point have already been considered by the tribunal in appeals arising from similar order and no stay has been granted and appeals have been disposed interims of larger bench judgment. therefore, we do not find any ground to grant either stay or to set aside the impugned order. in view of the larger bench judgment there is no merit in this stay application and in appeal an hence the ld. dr's contention is upheld. the stay application and the appeal is dismissed.

Judgment:
1. The stay application and appeal is taken up together for disposal as per flaw in view of the fact that the commissioner (Appeals) in the impugned order has followed the Larger Bench of a 5 Member judgment of CEGAT in the case of Jaypee Rewa Cement, Rewa Vs. CCE, Raipur as reported in 2000 (38) RLT 1111 (CEGAT-LB). The finding recorded by the Commissioner in para 5 to 7 are noted: "The issue involved in the instant appeal is regarding admissibility of the modvat credit under Rule 57A of the Central Excise Rule, 1944 on explosives used for excavating the lime stone in the mines situated outside the factory.

I find that this issue has been extensively dealt with by the 5 Member Bench of the Hon'ble CEGAT in the case of M/s. Jaypee Rewa Cement. Rewa Vs. CCE, Raipur - (2000 (38) RLT 1111 (CEGAT-LB)) in which 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 lime stone 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 quality to be "inputs" for the modvat credit under Rule 57A of the Central Excise Rules, 1944.

Respectfully following the ratio of the above decision of the Hon'ble CEGAT, by which I am bound as a matter of judicial discipline, I hold that the modvat credit on the explosives used in the mines for quarrying the lime stone is not admissible to the appellants under Rule 57A of the CE Rules, 1944. The Assistant Commissioner's order disallowing the modvat credit on explosives is upheld." 2. Shri M. Ramanjaneyulu, Asstt. Accountant appeared for the appellant factory and requested for adjournment of the matter of enable his advocate to argue the case. Ld. DR Shri A. Jayachandran opposed the prayer and submits that all the similar stay applications and appeals arising from similar order have been disposed off by confirming the impugned order. He submits that the ratio of the Larger Bench judgment squarely applies to the present case. There is no stay granted by the Apex Court and hence the stay application and appeal is required to be rejected without grant of adjournment as there is no case for keeping the matter pending.

3. On a careful consideration of the submissions, we notice that the issue has attained finality buy the judgment rendered by a 5 Member Larger Bench. They have clearly taken a view that explosives used outside the factory and in the mines cannot be considered as "inputs" for granting modvat credit under Rule 57(A) of CE Rules. The appellants in their appeal did not contest this fact of the use of explosives and explosive preparations in the mines for placing of lime stone yet they have claimed modvat credit on he basis of the earlier judgment of the Tribunal. Those judgment have been over ruled by the Large Bench and therefore question of applying those judgments does not arise. The point raised is that the matter is pending in reference before the Hon'ble High Court of Andhra Pradesh. This point have already been considered by the Tribunal in appeals arising from similar order and no stay has been granted and appeals have been disposed interims of Larger Bench judgment. Therefore, we do not find any ground to grant either stay or to set aside the impugned order. In view of the Larger Bench judgment there is no merit in this stay application and in appeal an hence the Ld. DR's contention is upheld. The stay application and the appeal is dismissed.