TaxTMI 
TaxTMI 
2001 (8) TMI 1332
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.... Excise Tariff. On the said explosives, excise duty had been paid, but the lime stone which was extracted, though an excisable item, was exempt from payment of excise duty by reason of an exemption notification. In the manufacture of cement, the appellants claimed Modvat credit in view of the provisions of Rule 57A of the Central Excise Rules. 3. The case of the appellants was that the explosives used in the mining operation must be regarded as inputs and in respect of which notification had been issued by the Central Government in the Official Gazette and credit should be allowed in terms of the said Rule. The excise authorities as well as the CEGAT did not accept the contention of the appellants. The Tribunal came to the conclusion that Rule 57F was applicable in this case as explosives had not been brought into the factory and they had been used at a place away from the cement factory. It was of the opinion that by virtue of the said provision, Rule 57A cannot be extended to take in within its ambit any goods used outside the factory for production of the final product. 4. Rule 57A with which we are concerned in this case reads as follows :- "Rul....
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....f the final products under Section 4 of the Act; and (iv) crates and glass bottles used for aerated waters." 5. The other rules which are relevant are Rule 57C which provides that credit for duty is not to be allowed if final products are exempt and Rule 57D provides for credit of duty not being denied or varied in certain circumstances. Rule 57F, on which reliance is placed by the Tribunal and also by Mr. Kailash Vasudev, learned Senior Counsel appearing for Revenue, reads as follows :- "Rule 57F. Manner of utilisation of the inputs and the credit allowed in respect of duty paid thereon. - (1) The inputs in respect of which a credit of duty has been [allowed under Rule 57A] - (i) [may be used in], or in relation to, the manufacture of final products for which such inputs have been brought into the factory; or (ii) shall be removed, after intimating the Assistant Commissioner of Central Excise having jurisdiction over factory and obtaining a dated acknowledgement of the same, from the factory for home consumption or for export under bond : Provided that where the inputs are removed from the factory for home consumpti....
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.... be specified in the notification, be allowed as credit under rule 57A." 7. As has already been observed, notification under Rule 57A was issued by the Central Government on 1st March, 1994 specifying the final product described in the table annexed thereto in respect of which duty paid on inputs was to be allowed as credit. The said table is as follows : Sl. No. Description of inputs Description of final products 1. 2. 3. 1. All goods falling within the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), other than the following namely, - All goods falling within the Schedule to the Central Central Excise Tariff Act, 1985 (5 of 1986), other than the following namely, - (i) goods classifiable under any heading of Chapter 24 of the Schedule to the said Act ; (i) goods classifiable under any heading of Chapter 24 of the Schedule to the said Act ; (ii) goods classifiable under Heading Nos. 36.05 or 37.06 of the Schedule to the said Act; (ii) goods classifiable under Heading Nos. 36.05 or 37.06 of the Schedule to the said Act; (iii) goods classifiable under sub-heading Nos. 2710.11, 2710.12,....
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....to the factory premises. The Tribunal, however, has not referred to the provisions of Rule 57J, the opening portion of which makes it clear that the said Rule will be applicable notwithstanding anything contained in the other Rules. According to Rule 57J, when the Central Government by notification specified the inputs used in the manufacture of intermediate products received by the manufacturer for use in or in relation to the manufacture of final product, then all such products on which duty has been paid credit will be allowed. Pursuant to this Rule 57J, notification was issued on 20th June, 1986 which was amended from time to time. The relevant part of the notification is as follows : S. No. Description of inputs Description of intermediate products Description of final products (1) (2) (3) (4) 1. All goods falling within the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), other than the following, namely, - All the goods falling within the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) other than the following, namely, - All goods falling within the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), other ....