Modvat/Cenvat credit in captive mines: inputs allowed, capital-goods credit depends on integrated-unit facts.

Modvat/Cenvat credit on inputs used in mines was held admissible, as the point was covered by an earlier binding decision; the assessee succeeded on that issue. Credit on capital goods used in mines depended on whether the mines were captive and formed one integrated unit with the cement factory. Where the mines were not captive and supplied limestone to different assessees, credit would not be available. Because a clear factual finding on the nature of the mines was required, the capital-goods issue was remanded for fresh determination, leaving the assessee with only partial relief.

---

---

Issues: (i) Whether Modvat/Cenvat credit on inputs used in mines was admissible; (ii) whether Modvat/Cenvat credit on capital goods used in mines was admissible, depending on whether the mines were captive mines forming an integrated unit with the cement factory.

Issue (i): Whether Modvat/Cenvat credit on inputs used in mines was admissible.

Analysis: The question of credit on inputs such as explosives and lubricating oils was treated as covered by the earlier binding decision on the point.

Conclusion: Credit on inputs was held admissible and the appeals were allowed to that extent in favour of the assessee.

Issue (ii): Whether Modvat/Cenvat credit on capital goods used in mines was admissible, depending on whether the mines were captive mines forming an integrated unit with the cement factory.

Analysis: Credit on capital goods was held to depend on the factual character of the mines. If the mines were captive and formed one integrated unit with the cement factory, credit would be available. If the mines were not captive and supplied limestone to different assessees, credit would not be available. As a clear finding on that factual question was required, the matters were sent back to the original authorities.

Conclusion: The issue of credit on capital goods was remanded for fresh factual determination.

Final Conclusion: The judgment granted relief on inputs, left the capital-goods question to be decided afresh on the factual nature of the mines, and therefore the assessee obtained only partial success.

---