UNION OF INDIA Vs. HINDUSTAN ZINC LTD

JUDGEMENT

(1.) THIS reference petition under Section 35- H (1) of the Central Excise Act, 1944 is at the instance of the department seeking reference of the following question of law arising from the order of the Customs, Excise and Gold (Control) Appellate Tribunal, New Delhi dated 6. 12. 2000:- " Whether the explosive used for blasting of mines for obtaining ores and not in the manufacture of Zinc, are eligible for exemption under notification No. 191/87 dated 4. 8. 1987?"

(2.) THE respondent Hindustan Zinc Ltd. is a public undertaking. THE company mines Zinc and Lead ore from its own mines at Rajpura, Maton and Zawar. THE company was granted L-6 licence to obtain goods falling under chapters 28, 29, 36 and 38 without payment of duty for use in the manufacture of Zinc and Lead concentrate in terms of Notification No. 191/87 dated 04. 08. 1987. THE said notification reads as follows:- " EXEMPTION TO GOODS FALLING WITHIN CHAPTERS 28, 29, 36 AND 38 [add on page 309 of Central Excise Tariff 1987-88] In exercise of the powers conferred by sub-rule (1) of Rule 8 of the Central Government hereby exempts goods falling within Chapters 28, 29, 36 and 38 of the schedule to the Central Excise Tariff Act, 1985 (5 of 1986), and used "in the manufacture of" Zinc of Lead concentrates, from the whole of the duty of excise leviable thereon which is specified in the said Schedule: Provided that where such use is elsewhere than in the factory of production, the procedure set out in Chapter X of the said rules is followed. [notification No. 191/87-C. E. , dt. 4. 8. 1987]

(3.) IN INdian Copper Corporation Ltd. vs. Commissioner of Commercial Tax, Bihar & Ors. (supra) explaining the expression "in the manufacture of" means the dealer engaged both in mining and manufacturing process, held both the processes interdependent. Thus, there can be no escape from the conclusion that extraction of Zinc and Lead ore is an important and integrated process in the manufacture of Zinc and Lead concentrates. Thus, the explosives used in mining operation are to be treated as used in manufacture of Zinc concentrates for the purpose of satisfying the conditions of Notification No. 191/87.