JAYPEE BELA PLANT Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) The issue involved in this Appeal, filed by M/s. JAYPEE Bela Plant (Unit of JAYPEE Cement Ltd.) is the admissibility of Notification No. 67/95 -C.E., dated 16.3.1995.

(2.) Shri R. Swaminathan, learned Consultant, submitted that the Appellants manufacture cement and clinker, that they sought exemption under Notification No. 67/95 C.E. in their classification Declaration effective from 26.5.95 in respect of machinery parts manufactured by them; that the similar declarations were filed by them in March 1997; that the Assistant Commissioner denied the exemption under Adjudication Order No. 18/97 dated 28.4.97 which was also upheld by the Commissioner (Appeals) under Order -in -Appeal No. 413/2000 dated 14.3.2000; that the Tribunal, vide Final Order No. 486/2000 -C dated 20.12.2000 allowed their Appeal; that in the meantime, the Range Superintendent had issued several show cause notices for disallowing the exemption for the period from September 1995 to July 1996; that the Assistant Commissioner, under Order No, 89 -97/98 dated 30.11.98 confirmed the demand of Central Excise duty and imposed penalty under Rule 173 Q on the ground that parts of the cement manufacturing machinery manufactured by them were excisable goods which had not been used in a factory as there was no factory of production at the time when exemption was claimed inasmuch as until they started commercial production of cement, there was no factory producing excisable goods; that the Commissioner (Appeals) under the impugned Order, rejected their Appeal holding that as per the definition of "Factory" in Section 2 (e) of the Central Excise Act the manufacturing process connected with the production of the goods must be on and the capital goods manufactured by them were being used in the setting up of the "factory" at the site of the factory.

(3.) The learned Consultant, further, submitted that in Order to all within the scope of Notification No. 67/95, the goods should be capital goods which should be manufactured in a factory and used in the factory of production; that with regard to the term 'manufacture' in a factory and used in the factory of production, the Notification only refers to items manufactured in a factory and not the finished products; that the Revenue wants to interpret the term 'factory of production' to mean that cement should be produced. The learned Consultant emphasized that the said term refers to the items produced in the factory which in their case are the capital goods which, in turn, are used in the manufacture of cement; that accordingly benefit of Notification is available. He finally mentioned that the issue is no longer res Integra as in the Appellants' own case, the Tribunal, vide Final Order No. 486/2000 -C dated 20.10.2000 has decisively held that the benefit in terms of Notification No. 67/95 can not be denied to them.