ADITYA CEMENT Vs. UNION OF INDIA

JUDGEMENT

(1.) THIS Reference Application under Section 35-H of the Central Excise Act, 1944 is made by the M/s. Aditya Cement, a Unit of Grasim Industries Limited seeking questions of law as framed in para 14-E arising out of the order dated 21. 5. 2001 passed by the Customs, Excise & Gold (Control) Appellate Tribunal, hereinafter referred to as "cegat".

(2.) AT the outset, it is submitted by the learned counsel for the applicant as well as the learned counsel for the department that the question of law, which is sought to be called for reference for the Tribunal has been answered by the Apex Court in M/s. Jaypee Rewa Cement vs. Commissioner of Central Excise (1 ). Though it is agreed by both the learned counsel for the parties that the question involved has been settled by the Apex Court and, as such, the Reference can be straightway answered but the requirement of law is that this court will have to first call the statement of case from the Tribunal and refer the question of law. Thus, this Court is to wait for the of the Act. Thus, the question arises for consideration is as to whether in a case where the facts, as revealed from the orders, are only facts on which the answer of question of law depends and is settled by the highest court of the Country, would it still be advisable to undertake the exercise of calling the reference? Section 35-H of the Central Excise Act, 1944 reads as follows : "section 35-H, Application to High Court.- (1) The Commissioner of Central Excise or the other party may, within one hundred and eighty days of the date upon which he is served with notice of an order under Section 35-C passed on or after the 1st day of July, 1999 (not being an order relating, among other things, to the determination of any question having a relation to the rate of duty of exercise or to the value of goods for purposes of assessment), by application in the prescribed form, accompanied, where the application is made by the other party, by a fee of two hundred rupees, apply to the High Court to direct the Appellate Tribunal to refer to the High Court any question of law arising from such order of the Tribunal. (2) The Commissioner of Central Excise or the other party applying to the High Court under sub-section (1) shall clearly state the question of law which he seeks to be referred to the High Court and shall also specify the paragraph in the order of the Appellate Tribunal relevant to the question sought to be referred. (3) On receipt of notice that an application has been made under sub-section (1), the person against whom such an application has been made, may, notwithstanding that he may not have filed such application, file, within forty-five days of the receipt of the notice, a memorandum of cross-objections verified in the prescribed manner against any party of the order in relation to which an application for reference has been made and such memorandum shall be disposed of by the High Court as if it were an application presented within the time specified in sub- section (1 ). (4) If, on an application made under sub-section (1), the High Court directs the Appellate Tribunal to refer the question of law raised in the application, the Appellate Tribunal shall, within one hundred and twenty days of the receipt of such direction, draw up a statement of the case and refer it to the High Court. "

(3.) THE petitioner Unit is engaged in the business of manufacturing cement falling under Chapter 25 of the Central Excise Tariff Act, 1985. THE manufacturing of cement is a continuous integrated process commencing with the extraction of limestone from mines, crushing of limestone subjecting it to various manufacture/processes by which the same is converted into clinker, pulverising/grinding such clinker and mixing the same with gypsum to manufacture cement. Since the process is an integrated one, each one of the inputs/goods/items that contribute to the various processes are to be considered as contributing to the producing or processing of cement. THE petitioner used duty paid explosives namely Grilled Ammonium Nitrate, Detonator, Cordtex Fuse, Booster & Primex in blasting operations for producing limestone in its captive mines and claimed modvat credit of the duty paid thereon under Rule 57-A of the Rules. THE Tribunal decided the appeal against the petitioner assessee in view of the larger bench decision of the Tribunal in the case of M/s. Jaypee Rewa Cement's case (supra ). THE said decision has been reserved by the Apex Court in M/s. Jaypee Rewa Cement's case (supra ). THE Apex Court considering the Rule 57-A (1) of the Central Excise Rules, found that the said rule does not in any way specify that the inputs have to be utilised within the factory premises. Dealing with Rule 57-J, the Court expressed that even in respect of the inputs used in the manufacture of intermediate product which product is then used for the manufacture of a final product, the manufacturer would be allowed credit on the duty paid in respect of the input. THE Court concluded that - "on the explosives a duty had been paid and the appellants would be entitled to claim credit because the explosives were used for the manufacture of the intermediate product, namely limestone which, in turn, was used for the manufacture of cement. "