Mother Dairy Vs. Commissioner of Central Excise - Court Judgment

Excerpt:
2. the issue involved is whether the cenvat credit is correctly availed and utilized on furnace oil stored outside the factory without proper permission and used in the manufacture of steam outside the factory. it is seen that the factory is a composite structure consisting of different floors, the activities of storing furnace oil and using the same in the manufacture of steam have been carried out within the precincts of the factory premises. the definition of factory as given in section 2 (e) is as under:- "factory means any premises, including the precincts thereof, wherein or in any part of which excisable goods other than salt are manufactured, or wherein or in any part of which any manufacturing process connected with the production of these goods is being carried on or is ordinarily carried on." thus in the facts of the present case it cannot be said that the furnace oil is stored and used outside the factory premises. we find that the appellant has fully complied with the provisions of rule 57ab of the cenvat credit rules. therefore, in our view it was not justifiable for the department to have refused the credit.3. the id. counsel in support of his contention has relied on the following decisions:-bongaigaon refinery & petrochem ltd. v. collector of c.ex (a), caldhampur sugar mills ltd. v. cce, meerut - 2001 (129) e.l.t.73 (tri. del) - 2001 (129) e#.l.t.73 (tri. del)finolex inds. ltd. v. cce, pune ii - 2003 (156) e.l.t.96 (tri. mumbai)navsari oil products ltd. v. cce, surat - 2003 (55) rlt 96 (cegat-mum)cce, tirunelveli v. sudarsanam spinning mills - 2004 (62) rlt 70 (cestat-che.) (l) cce, delhi iv, faridabad v. super auto (india) ltd. - 2004 (61) rlt 750 (cestat-del.)cce, indore v. indore steel and iron mills ltd. - 2003 (59) rlt 409 (cestat-delk.)indore steel & iron mills ltd. v. cce, indore - 2002 (147) e.l.t.611 (tri.del.) 4. the ld. jdr however, opposed the contention of the ld. counsel and drew our attention to para 4.3.1 of the impugned order which belie the contention of the id. counsel.5. after hearing both sides, perusal of the records and case laws, we are of the opinion that the definition of the factory as given in section 2(e) is comprehensive enough to say that the activities of storing and using the furnace oil has been done by the appellant within the factory and as such we do not see any justification for dis-allowance of the credit and imposition of the penalty. we, therefore, set aside the impugned order and allow the appeal filed by the appellant.

Judgment:
2. The issue involved is whether the Cenvat Credit is correctly availed and utilized on furnace oil stored outside the factory without proper permission and used in the manufacture of steam outside the factory. It is seen that the factory is a composite structure consisting of different floors, The activities of storing furnace oil and using the same in the manufacture of steam have been carried out within the precincts of the factory premises. The definition of factory as given in Section 2 (e) is as under:- "Factory means any premises, including the precincts thereof, wherein or in any part of which excisable goods other than salt are manufactured, or wherein or in any part of which any manufacturing process connected with the production of these goods is being carried on or is ordinarily carried on." Thus in the facts of the present case it cannot be said that the furnace oil is stored and used outside the factory premises. We find that the appellant has fully complied with the provisions of Rule 57AB of the CENVAT Credit Rules. Therefore, in our view it was not justifiable for the department to have refused the credit.

3. The Id. Counsel in support of his contention has relied on the following decisions:-Bongaigaon Refinery & Petrochem Ltd. v. Collector of C.Ex (A), CalDhampur Sugar Mills Ltd. v. CCE, Meerut - 2001 (129) E.L.T.73 (Tri. Del) - 2001 (129) E#.L.T.73 (Tri. Del)Finolex Inds. Ltd. v. CCE, Pune II - 2003 (156) E.L.T.96 (Tri.

Mumbai)Navsari Oil Products Ltd. v. CCE, Surat - 2003 (55) RLT 96 (CEGAT-Mum)CCE, Tirunelveli v. Sudarsanam Spinning Mills - 2004 (62) RLT 70 (CESTAT-Che.) (l) CCE, Delhi IV, Faridabad v. Super Auto (India) Ltd. - 2004 (61) RLT 750 (CESTAT-Del.)CCE, Indore v. Indore Steel and Iron Mills Ltd. - 2003 (59) RLT 409 (CESTAT-Delk.)Indore Steel & Iron Mills Ltd. v. CCE, Indore - 2002 (147) E.L.T.611 (Tri.Del.) 4. The ld. JDR however, opposed the contention of the ld. Counsel and drew our attention to para 4.3.1 of the impugned order which belie the contention of the Id. Counsel.

5. After hearing both sides, perusal of the records and case laws, we are of the opinion that the definition of the factory as given in Section 2(e) is comprehensive enough to say that the activities of storing and using the furnace oil has been done by the appellant within the factory and as such we do not see any justification for dis-allowance of the credit and imposition of the penalty. We, therefore, set aside the impugned order and allow the appeal filed by the appellant.