Cenvat credit on cement used in mine construction denied because building material is not part of the manufacturing process.

Cement used as construction or building material in mining foundations and safety support is not an input for Cenvat credit under the Cenvat Credit Rules, 2002/2004. Applying the settled view that cement used for construction does not become an input for manufacture and that such foundations are not capital goods, the Court treated the material as neither directly nor indirectly integral to the manufacturing process. Cenvat credit was therefore held inadmissible, and the issue was decided in favour of the Revenue and against the assessee.

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Issues: Whether cement, used as construction or building material in the mines, is eligible as input for availment of Cenvat credit under the Cenvat Credit Rules, 2002/2004.

Analysis: The dispute turned on whether cement used for laying foundations and providing safety support in the mining area could be treated as an input connected with manufacture. The Court applied the earlier binding view that cement used as a building material for construction of foundations does not become an input for manufacture, nor does such a foundation fall within capital goods. Cement used in this manner was held to be neither directly nor indirectly an integral part of the manufacturing process, and therefore outside the scope of admissible Cenvat credit.

Conclusion: Cement used as construction or building material in the mines is not eligible as input for Cenvat credit. The question was answered in the negative, in favour of the Revenue and against the assessee.

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