MADRAS CEMENTS LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THE appellants are manufacturers of cement. During the period (January to June 1996), they were availing the facility of Modvat credit under Rules 57A and 57Q of the Central Excise Rules, 1944. The original authority disallowed credits totalling to Rs. 48,88,730/ - under Rule 57A for the above period, in respect of machinery parts, Belt, steel machine parts, spring blades, cleaning system. Roll assembles, spare parts for surface miner, tyre protection items, button bits, cross belt analyser cartridge, Gyro meter, ball bearings, conveyor belts, electric cables, digital indicator, PVC insulated wire, carbon brus, Diesel oil engine, Generator, Tracet, Tooth point bucket, and Hydraulic cylinder etc. The appeal filed by the assessee against the decision of that authority was dismissed by the Commissioner (Appeals). Hence the present appeal.

(2.) THERE is no representation for the appellants today despite notice, nor is there any request of theirs for adjournment. In the circumstances, we are disposing of this old appeal.

(3.) AFTER examining the records and hearing ld. SDR, we find that, in the impugned order, all the above items were held to be expressly excluded from the scope of "in -put" defined under Rule 57A ibid. Ld. Commissioner (Appeals) held that all the above items fell within the category of machines, machinery, equipments, apparatus and appliances, which were excluded items under the explanation to Rule 57A and hence the assessee was not eligible for input duty credit on such goods. It further appears that, at no stage, the assessee alternatively claimed capital goods credit on the above items. Some of the items were used in mines outside the cement factory. In respect of such items, it appears, the question whether the mines could be considered as part of factory defined under Section 2(e) of the Central Excise Act so that credit on such goods could be availed by the assessee was considered by the Hon'ble High Court of Andhra Pradesh in a reference application filed by them. The appeal memorandum says that the reference in question was decided in favour of the appellants. Apparently this development was subsequent to the passing of the impugned order and, therefore, ld. Commissioner (Appeal) had no occasion to take into account the High Court's judgment. It further appears to us that, though all the items were held to be excluded from the scope of input, the question whether they could be held to be capital goods eligible for Modvat credit was not examined by the lower appellate authority. Apparently such an alternative relief was not prayed for by the assessee. As regards capital goods used in off factory mines, it has, of late, been held in Vikram Cement v. CCE, Indore 2006 (197) ELT 145(SC) that if the mines are captive mines constituting one integrated unit together with the cement factory. Modvat credit/Cenvat Credit on the capital goods used in such mines will be admissible to the cement manufacturers. This ruling also was not available to the Commissioner (Appeals).