Modvat credit on mining explosives denied where raw materials were extracted away from the factory and precedent controlled the issue.

Modvat credit under Rule 57A was held inadmissible on explosives used to mine raw materials from mines located away from the factory. The claimed nexus between the explosives and the manufacturing process was rejected for Modvat purposes, because the issue was already governed by a binding Larger Bench precedent decided against the assessee. On that basis, credit was denied and the impugned order was sustained.

---

---

Issues: Whether Modvat credit was admissible under Rule 57A on explosives used for mining raw materials from mines situated away from the factory.

Analysis: The entitlement to credit was held to be governed by the Tribunal's Larger Bench decision, which had already decided the same question against the assessee. On that basis, the claimed nexus between the explosives and the manufacturing process was not accepted for Modvat purposes.

Conclusion: Modvat credit under Rule 57A was not admissible on the explosives used for mining the raw materials, and the issue was decided against the assessee.

Final Conclusion: The impugned order was sustained and the appeal failed.

Ratio Decidendi: Where the use of goods is for mining raw materials away from the factory and the question is covered by binding Larger Bench precedent, Modvat credit under Rule 57A is not available.

---