DCW LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THIS appeal filed by appellants DCW Ltd. is directed against the Order -in -Appeal No. 72/2002(MDU)(GVN), dated 28 -3 -2002 whereby he has rejected the appeal filed by the appellants by upholding the order of the original authority by which the original authority had disallowed the benefit of Modvat Credit in respect of LDPE blank film used in the manufacture of PVC resin, Caustic soda and Ilminite.

(2.) BRIEF facts of the case are that the appellants are manufactures of Caustic Soda, Hydrochloric Acid, Tricholoroethylene, PVC resin and Ilmenite among various other chemicals and they avail benefit of Modvat Credit on various inputs and capital goods after complying with the various procedural formalities in terms of the Modvat Rules. Salt is their principal raw material for manufacture of Caustic Soda which is an excisable final product. To stop seepage of saline water they laid flat tubings/LDPE liners on the salt pans. These tubings/LDPE liners get damaged and are thus periodically replaced. They filed declaration with the proper officer for excise duty paid on these salt liners under Rule 57A as it is used in the manufacture of salt which is raw material for caustic soda. The Modvat Credit on the item LDPE black films was denied on the ground that the said item is used in salt pans and not in the manufacturing premises and that salt is not an excisable product and hence the LDPE films which are used for producing the salt is not eligible for the benefit of Modvat Credit. Later on as requested by the appellants, salt pans was also included in the Registration Certificate granted by the Assistant Collector and the appellants also filed Modvat declaration on salt liners as it is used in the manufacture of salt for production of Caustic soda and which is not excluded from the purview of Modvat benefit in terms of Notification issued under Rule 57J. Aggrieved by the said order of the original authority which is confirmed in appeal by the tower appellate authority, the appellant has come in appeal.

(3.) SHRI P.S. Raman, learned Counsel for the appellants referred to the grounds of appeal wherein it is stated that in this case Modvat Credit on LDPE films was denied on the only ground that the said item is used in the salt pans and not in the manufacturing premises. He further submitted that though the order of inclusion of salt pans in the Registration Certificate was made on 31 -3 -2000 they had made application for inclusion as early as on 9 -10 -95. He has also relied upon various case laws including the judgment of the Hon'ble Supreme Court in the case of Jaypee Rewa Cement v. CC, MP reported in 2001 (133) E.L.T. 3 (SC) wherein it has been held that input need not be utilized only within the factory premises in terms of erstwhile Rule 57A. Explanation contained in Rule 57A ibid is merely meant to enlarge meaning of the word 'input' and does not in any way restrict the use of the input within the factory premises nor does it require the input to be brought in to the factory premises. It was also held therein that Explosives used for the manufacture of the intermediate product namely lime stone, which in turn was used for the manufacture of cement is entitled for Modvat credit. It was also held therein that inputs even used in the manufacture of intermediate product which product is then used for the manufacture of a final product is entitled for the benefit of Modvat credit, The learned Counsel therefore, sought for allowing the appeal.