INDIA CEMENTS LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THE appellants are manufacturers of cement and clinkers. The limestone required for this manufacture is excavated from their mines lying beyond the factory compound. According to a report dated 27 -5 -2005 of the Addl. Commissioner of Central Excise received by the SDR from the Commissionerate concerned, there are two mining areas near the cement factory, which are called West Block and North Block. The West Block mine is spread over three villages viz. Dalavoi, Danakurichi and Mullukurichi and the North Block mine is comprised in two villages viz. Alathiyur and Kottaikadu. West Block mine is about 250 mtrs. away from the rear gate of the factory compound. The North Block mine is at a distance of about 1 1/2 kms. from the said gate. The entire mining area is separated from the factory compound by a small brook/canal (Anavari Odai) which is lying outside, and parallel to, the rear boundary wall of the factory compound. These facts reported by the Commissionerate are not in dispute. A "Location Plan" produced by the appellants' counsel also indicates that the factory compound and the West Block mine are lying on the western and eastern sides of the Anavari Odai which is flowing northward into Vellar river. The North Block mine, which is further away, is separated from the West Block mine by a large area of land. The location plan would, by and large, justify the facts reported from the Commissionerate. However, it is noticed that, according to the location plan, the factory and the mines are comprised in two villages only (Dalavoi and Alathiyur), whereas the report received from the Commissionerate mentions five villages (including Dalavoi and Alathiyur). The report proceeds to say that the appellants have one limestone -feeding tower in the West Block mine and that, in both the mines, limestone is being excavated, crushed and conveyed to dumpers and loaders by using surface miners. This limestone is fed into the above feeding tower as well as the crusher which is located within the factory compound wall. Pulverized limestone from the crusher is again transported to limestone stacker yard through another conveyor belt. These facts are also not in dispute, no objection having been filed by the appellants with reference to any of the facts stated in the above report.

(2.) THE report further says that the department has not given any "approved plan" to the assessee. It is stated that there is no such requirement in law. Ld. Consultant for the assessee has admitted that they did not receive any "approved plan" from the department when they received the Central Excise Registration Certificate (under Rule 174 of the Central Excise Rules, 1944) or thereafter. However, ld. Consultant has contested the department's claim that there was no legal requirement of having to issue 'approved plan' to registered manufacturers. It is pointed out that the proper officer of Central Excise was required, under Rule 44(3), to issue a Certificate of Approval to a registered manufacturer who had submitted his factory plan along with declaration of factory premises and equipments. Ld. Consultant has also referred to the provisions of Rule 174 as well as to the CBEC's "Excise Manual of Supplementary Instructions" on the above aspect. According to these instructions, a duplicate copy of the plan should be returned, along with registration certificate, to the registered manufacturer. Ld. Consultant has pointed out that no such plan was ever returned to the appellants by the department.

(3.) THE report received from the Commissionerate has raised certain legal contentions also. Relying on the definition of "factory" under Section 2(e) of the Central Excise Act and Section 2 of the Factories Act, the report asserts that the mining area cannot be accepted as part of the cement factory. Reliance has also been made on the Supreme Court's judgments in the cases of Jaypee Rewa Cement v. CCE, M.P. and CCE, Jaipur v. J.K. Udaipur Udyog Ltd, . Ld. SDR has reiterated these arguments. She has also relied on the Final Order Nos. 1088 -1091/2005 passed by the Tribunal's South Zonal Bench in Appeal Nos. E/757 and 777/2002 and No. E/8 and 126/2005, wherein it was held that the limestone mine, where limestone was excavated for the purpose of manufacture of cement, was not a part of the factory and hence the capital goods and inputs used in the mines were not eligible for Cenvat credit.