TMI Blog2017 (5) TMI 514X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Cenvat Credit Rules recorded that the SCN itself admits that the goods have been used for undertaking mining activities on behalf of the assessee. As such there is no removal of inputs or capital goods and there is no question of any reversal under rule 3(5) of the Cenvat Credit Rules 2004. Therefore, credit cannot be denied in this case - In the absence of any evidence to show that these goods were never used in the mining area of the respondent, the findings recorded by the adjudicating authority are correct and there is no need for interference in such reasoned order - credit remains allowed. Reliance placed in the case of C.C.E., Raipur Versus Bhilai Steel Plant [2017 (1) TMI 293 - CESTAT NEW DELHI], where it was held that no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h are sold. The respondent filed the detailed submissions and contested the show cause notice denying all the allegation made therein. Adjudicating authority after following due process of law came to the conclusion that the proceedings initiated by the show cause notice are not correct and needs to be dropped; to come to such a conclusion, he held that a contractor was using the goods exclusively for the work of the respondent; there is no physical removal of goods from the factory i.e. mining and hence provisions of Rule 3(5) of Cenvat Credit Rules are not attracted; the reliance placed by the Revenue on the judgment of Hon ble High Court of Rajasthan in the respondents own case in respect of sales tax is wrong; explosives and detonators ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of Cenvat Credit by the contractors and it cannot be availed by them as they are not undertaking any manufacturing activity. It is his submission that the appellant has never issued the above items for use in the production process of the finished goods. 6. Ld. Counsel supports the impugned order and submits that the adjudicating authority has correctly interpreted the provisions of rule 3(5) as being not applicable in the absence of any physical removal of the goods. It is his submission that the items like explosives, detonators, lubricants, pipes, rods and other goods were within the mining area and procured by the appellant from the suppliers on payment of Central Excise Duty. He submits that the reliance is placed to the decisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further find that recovery of credit already taken can be effected if the inputs are not used in or in relation to the manufacture of final products or are removed as such, or capital goods have not been utilized within the factory or have been removed as such; in these circumstances alone, the cenvat credit allowed can be recovered. The show cause notice itself admits that the goods have been used for undertaking mining activities on behalf of the assessee. As such there is no removal of inputs or capital goods and there is no question of any reversal under rule 3(5) of the Cenvat Credit Rules 2004. Therefore, credit cannot be denied in this case. 5.9 I further find in the show cause notice itself, it had been mentioned that the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... od the material, equipments, facilities, explosives and detonators were provided by the assessee free of cost to the contractors, for use in the work of their company. In view of the above, it cannot be said that the assessee has sold these items to contractors as there is evidence of free supply of these items by the assessee to the contractors during the period of dispute. 9. As against above reproduced factual findings by the adjudicating authority, revenue has not controverted the same effectively in as much there is no dispute as the fact that explosives, detonators, lubricants, pipes, rods and other goods are consumed within the mining area of the respondent. In the absence of any evidence to show that these goods were never use ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the factory premises as licensed under Central Excise Provisions in respect of the appellants continued to be unaffected and no separate central excise license with de-marketed premises was given to the power plant separately. In such situation, the Revenue cannot take a stand that the power plant is another factory and not to be considered as within the factory of the appellant. The appellant s case is further strengthened in view of the fact that all the inputs transferred to the power plants by the appellant are fully utilized in or in relation to the manufacture of electricity which in turn is fully used captively by the appellants. 12. In view of the facts and circumstances of this case and authoritative judicial pronounceme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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