TMI Blog2023 (10) TMI 872X X X X Extracts X X X X X X X X Extracts X X X X ..... dit facility, which is available on inputs used in the manufacture of final product, the Authorities have inprinciple accepted that the activity of coal mining amounts to manufacture . The department has not raised any objection to payment of duty by the Appellant by treating the process as amounting to manufacture . In fact, the very demand in the Notice has been raised by charging duty at the rate of 5%, which is applicable along with Cenvat facility. For the purpose of demanding duty on coal, the Department considers that the Coal mining activity would amount to manufacture . But, the very same coal mining activity has been considered as not amount to manufacture for the purpose of consideration of exemption under Notification N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of duty at the concessional rate of 1% was optional, the Appellant opted to make the payment of Central Excise Duty at the normal tariff rate of 5% with CENVAT credit facility. The Appellant duly claimed the benefits of CENVAT credit of inputs, inputs services and capital goods under the CCR and started making payments of Central Excise Duty at the normal tariff rate of 5% instead of paying concessional rate of 1%. 3. The Appellant is captively using some quantity of coal within the mines for further production of coal. The said quantity of coal is used to generate steam to be used as power for the purpose of lifting coal from the underground mines by using mechanical means. The Appellant claimed that the coal so captively used, since n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rpose of consideration of exemption under Notification No. 67/95 . 6. The Appellant further submitted that the Ld. Commissioner, has wrongly applied the decision of the Hon ble Supreme Court in the case of CCE, Bhubaneswar v. Tata Iron and Steel Company Limited 2003(154)ELT 343(SC) to hold that the activity of coal mining is a production activity and not a manufacturing activity. In the said decision, the Hon ble Apex Court was interpreting the provisions of Coal Mines (Development and Regulation) Act, 1974, with regard to the leviability of Additional Customs Duty. The provision of Central Excise Act, 1944, was not the subject matter for consideration before the Hon ble Court in the said case. The said decision of the Hon ble Supreme Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1944. Accordingly, it has been clarified therein that there would not be any requirement to make any amendment in the definition of manufacture under Section 2(f) of the Central Excise Act, which clearly implies that coal mining activity is already covered as an activity amounting to manufacture and exigible to central excise levy and, therefore, no further amendment is warranted so as to bring it within the purview of Central Excise Levy. 9. In view of the above submissions, the Appellant prayed that the demand of duty on the coal consumed captively, is legally not sustainable. Further, there cannot be any case of imposition of penalty since the issue involves interpretation of legal provisions as has been held by the Hon ble Courts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pted for payment of Central Excise Duty at the normal tariff rate of 5% with CENVAT credit facility , which is not in dispute. Having allowed the CENVAT credit facility, which is available on inputs used in the manufacture of final product, the Authorities have inprinciple accepted that the activity of coal mining amounts to manufacture . The department has not raised any objection to payment of duty by the Appellant by treating the process as amounting to manufacture . In fact, the very demand in the Notice has been raised by charging duty at the rate of 5%, which is applicable along with Cenvat facility. Thus, we observe that for the purpose of demanding duty on coal, the Department considers that the Coal mining activity would amount t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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