DIAMOND CEMENTS Vs. CCE

JUDGEMENT

(1.) THE above appeals arise out of separate orders in appeal relating to the issue of admissibility of modvat credit and are hence heard together and disposed of by this common order.

(2.) IN the appeals arising out of order in appeal No.287 to 294/2003 the issue relates to admissibility of credit on explosives used in mines and on inputs used for the generation of electricity. The period covered is both prior to and subsequent to 1.4.2000. In the above appeals arising out of order in appeal No.297 -98/CE/BPL/2003 the issue relates only to admissibility of credit on explosives used in mines and the entire period is prior to 1.4.2000.

(3.) WE have heard both sides. It has already been held by the Supreme Court in the case of Jay Rewa Cements v. CCE M.P. 2001 (133) ELT 3 (SC) that inputs need not be utilized only within the factory premises in terms of Rule 57A of the Central Excise Rules, 1944, as it stood during the period prior to 1.4.2000 and that explosives used in mines for manufacture of lime stone which in turn was used for the manufacture of cement are entitled to modvat credit. In the case of the same appellants (2004 (169) ELT 34) the Tribunal held that credit is admissible on inputs used for generation of electricity as unit No.(1) and Unit No.(2) are adjacent to each other and are regarded as one factory. (The objection of the Revenue is that unit are different and are to be treated as separate factories and that since inputs were used in Unit No.(1) while electricity was supplied to Unit No.(3), credit is not admissible on inputs used for generation of electricity). As for the period subsequent to 1.4.2000 in the light of the Apex Court judgment in CCE, Jaipur v. J.K. Udaipur Udyog Ltd. 2004(171) ELT 289 (SC) that use of the inputs must be within the factory of production and that explosives used in the mines away from the factory do not qualify to be inputs for the purpose of availing modvat credit, we hold that input credit is not admissible to explosives used in mines post 1.4.2000, since the mines, although adjacent to the factory premises are still outside the factory premises.