Century Cement Vs. Commissioner of Central Excise - Court Judgment

Excerpt:
through the present stay application/ the appellants have sought waiver of the pre-deposit of the duty amount of rs. 3,83.587/- which has been confirmed against them through the impugned order-in-appeal by the commissioner (appeals), by disallowing them modvat credit on explosives used outside the factory premises.2. the learned counsel has contended that the case of the appellants stands squarely covered by jaypee rewa cement v. cce - 2001 (133) e.l.t. 3 (s.c.) which had been followed by the tribunal in commissioner of central excise v. j.k. udaipur udyog ltd. - 2002 (147) e.l.t. 877 and that for the earlier period, the appellants had been allowed modvat credit on the explosives. he had also submitted that the amended definition of the input which came into force from 1-7-2000 did not.....

Judgment:
Through the present stay application/ the appellants have sought waiver of the pre-deposit of the duty amount of Rs. 3,83.587/- which has been confirmed against them through the impugned order-in-appeal by the Commissioner (Appeals), by disallowing them Modvat credit on explosives used outside the factory premises.

2. The learned Counsel has contended that the case of the appellants stands squarely covered by Jaypee Rewa Cement v. CCE - 2001 (133) E.L.T. 3 (S.C.) which had been followed by the Tribunal in Commissioner of Central Excise v. J.K. Udaipur Udyog Ltd. - 2002 (147) E.L.T. 877 and that for the earlier period, the appellants had been allowed Modvat credit on the explosives. He had also submitted that the amended definition of the input which came into force from 1-7-2000 did not stand on a different footing than the earlier one. The learned Counsel has contended that it is a fit case where total waiver of the pre-deposit of the duty deserves to be allowed.

3. On the other hand, the learned JDR has reiterated the correctness of the impugned order.

4. I have heard both sides and gone through the record. The bare perusal of the Apex Court judgment in Jaypee Rewa Cement supra shows that Modvat credit is available to an assessee in respect of the explosives used for the manufacture of intermediate product which product is then used in the manufacture of the final product. But after the amendment which came into effect from 1-7-2000, while defining the expression "input" it has been specified that the same must be used in the factory. The observations of the Tribunal in CCE v. J.K. Udaipur Udyog Ltd. that the erstwhile definition of the input and the amended definition had the parity and were not different, in my view, do not in any manner prima facie apply to the facts of the present case. I have perused the impugned order and the Commissioner (Appeals) has recorded his reasons for disallowing the Modvat credit. Therefore, it would not be legally justifiable to hold at this stage when only the stay application is being disposed of, that the case of the appellants is covered by the above said judgment. It is a case where the interpretation of the Rule 57A and the amended definition of the expression "input" is involved. Therefore, it is not a fit case to allow total waiver of the pre-deposit of the duty amount.

5. Therefore, keeping in view the facts and circumstances of the case and the issue involved, the appellants are directed to make pre-deposit of Rs. 2 lakhs within 8 weeks from today. On making this deposit, the pre-deposit of the balance duty shall remain waived and recovery stayed during the pendency of the appeal. But failure to comply with the terms of the stay order shall result in dismissal of the appeal without prior notice under Section 35F of the Act. To come up for reporting compliance on 19-11-2003.