TMI Blog2001 (8) TMI 1332X X X X Extracts X X X X X X X X Extracts X X X X ..... U.A. Rana, Ms. Shalini Mittal, Mainal Bharti, Sanjay Grover, Rajesh Kumar, M. Gauri Shankar Murthy, Dileep Tandon, Pritesh Kapoor, B.K. Prasad, V. Sridharan, A.R. Madhav Rao, Advocates with him for the appearing parties. JUDGMENT The appellants M/s. Jaypee Rewa Cement are manufacturers of cement in their factory at Raipur. Lime Stone is an essential raw material for the said manufacture, but in order to extract lime stone explosives are used for mining the same. 2. It is not in dispute that the explosives which are used are items falling under Chapter 36 of the Excise Tariff. On the said explosives, excise duty had been paid, but the lime stone which was extracted, though an excisable item, was exempt from payment of excise duty by reason of an exemption notification. In the manufacture of cement, the appellants claimed Modvat credit in view of the provisions of Rule 57A of the Central Excise Rules. 3. The case of the appellants was that the explosives used in the mining operation must be regarded as inputs and in respect of which notification had been issued by the Central Government in the Official Gazette and credit should be allowed in terms of the said Rule. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appliances used for producing or processing of any goods or for bringing about any change in any substance in or in relation to the manufacture of the final products; (ii) packaging materials in respect of which any exemption to the extent of the duty of excise payable on the value of the packaging materials is being availed of for packaging any final products; (iii) packaging materials or containers, the cost of which is not included in the assessable value of the final products under Section 4 of the Act; and (iv) crates and glass bottles used for aerated waters. 5. The other rules which are relevant are Rule 57C which provides that credit for duty is not to be allowed if final products are exempt and Rule 57D provides for credit of duty not being denied or varied in certain circumstances. Rule 57F, on which reliance is placed by the Tribunal and also by Mr. Kailash Vasudev, learned Senior Counsel appearing for Revenue, reads as follows :- Rule 57F. Manner of utilisation of the inputs and the credit allowed in respect of duty paid thereon. - (1) The inputs in respect of which a credit of duty has been [allowed under Rule 57A] - (i) [may be used in], or in r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation in the Official Gazette, specify the inputs used in the manufacture of intermediate products received by a manufacturer for use in or in relation to the manufacture of final products, in respect of which the specified duty paid on the said inputs shall subject to the conditions and restrictions that may be specified in the notification, be allowed as credit under rule 57A. 7. As has already been observed, notification under Rule 57A was issued by the Central Government on 1st March, 1994 specifying the final product described in the table annexed thereto in respect of which duty paid on inputs was to be allowed as credit. The said table is as follows : Sl. No. Description of inputs Description of final products 1. 2. 3. 1. All goods falling within the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), other than the following namely, - All goods falling within the Schedule to the Central Central Excise Tariff Act, 1985 (5 of 1986), other than the following namely, - (i) goods classifiable under any heading of Chapter 24 of the Schedule to the said Act ; (i) goods classifiab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovided that there will be nil rate of duty on the lime stone which is extracted. 12. As we have already noticed, the Tribunal has relied upon Rule 57F in coming to the conclusion that the inputs in respect of which a credit of duty is claimed must be those which are used in or brought into the factory premises. The Tribunal, however, has not referred to the provisions of Rule 57J, the opening portion of which makes it clear that the said Rule will be applicable notwithstanding anything contained in the other Rules. According to Rule 57J, when the Central Government by notification specified the inputs used in the manufacture of intermediate products received by the manufacturer for use in or in relation to the manufacture of final product, then all such products on which duty has been paid credit will be allowed. Pursuant to this Rule 57J, notification was issued on 20th June, 1986 which was amended from time to time. The relevant part of the notification is as follows : S. No. Description of inputs Description of intermediate products Description of final products (1) (2) (3) (4) 1. All goods fallin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roduct, namely, lime stone which, in turn, was used for the manufacture of cement. 14. We are, therefore, in agreement with the learned Counsel for the appellants that the wide language used in Rule 57A entitles the appellants to claim the benefit when the said Rule is read along with Rule 57J. 15. For the aforesaid reasons, these appeals are allowed and the judgment of the Tribunal is set aside. CA Nos. 6932/2000, 6900-6905/2000, 7131-7132/2000, 7337-7340/2000, 7195-7200/2000, 2301/2001, 2515/2001, 3992/2001, 3994-3995/2001, 4383/2001, 4784/2001 and 2577/2001. 16. The principle involved in these cases is similar to that in the case of M/s. Jaypee Rewa Cement. For the reasons stated therein, these appeals are also allowed. C.A. No....6064..../2001 @ SLP (C) No. 20785/2000 17. Leave granted. 18. For the reasons stated in the case of M/s. Jaypee Rewa Cement the appeal is allowed. Reference is now answered in favour of the assessee and the decision of the Tribunal is upheld. CA Nos. 3965-3968/2001 19. The challenge in these appeals relate to the validity of the show cause notice whereby Modvat was proposed to be disallowed on the use of high speed d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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