TaxTMI 
TaxTMI 
2005 (12) TMI 104
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.... used to carry lime stone from their mines to the factory premises. 3.The Assessing Officer as well as the Commissioner, Central Excise (Appeals) decided against the appellant and passed an order withdrawing the Modvat credit availed by the assessee on the aforesaid items. Before the Tribunal while the Revenue relied on the observations made by the Supreme Court in Jaypee Rewa Cement v. Commissioner of Central Excise, M.P. - 2001 (133) E.L.T. 3 (S.C.), the assessee contended after putting the plan which shows the factory, the mining area and the crusher, including the conveyor belt connecting the crusher within the factory, that the land on which the conveyor belt has been installed is the property of the assessee and is connected to and is part of the factory; that all these items are installed in an area which is adjacent to the factory i.e., in an area which can be called as precincts of the factory in terms of Section 2(e) of the Central Excise Act, 1994 and are being used in connection with the manufacture of final product. Thus, they are eligible for Modvat credit under Rule 57Q. The assessee relied on the decision of the Tribunal in case of C.C.E., Chennai v. Pepsico Indi....
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....it because they were used at a place away from factory? 5. Where the use of capital goods in captive mines for obtaining limestone, an intermediate product, which is then used for manufacturing cement can be considered to be a process in the manufacture of final goods? 6. Whether the process of mining limestone in captive mines undertaken by cement factory can be considered as integral to the process of manufacture of cement, more particularly in view of the fact that mining area lying adjacent to the cement factory area is also nothing but a part of factory area? 7. Whether it can be said that Hon'ble Supreme Court has in Jay Pee Rewa's case disallowed Modvat credit on capital goods used in mines? 8. Whether the Tribunal was right in disallowing Modvat credit on the basis of judgment of the apex court in Jay Pee Rewa's case more particularly when in the present case capital goods in question were used at crusher and conveyor belt and not at all in the mining area? 9.  ....
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....f law to this Court for its decision and then decision was to be rendered after the statement of case has been received. However, it has been pointed out to us that since filing of the aforesaid application as well as the writ petition, the subject matter is no more res integra and is finally decided by the Supreme Court in Birla Corporation Ltd. v. Commissioner of Central Excise - 2005 (186) E.L.T. 266 (S.C.). Therefore, the matter may be decided by considering the aforesaid decision. 11.It is pointed by the learned counsel for the petitioner that the Supreme Court in Birla Corporation Ltd's case (supra) has held that rope way installed for transporting raw material from the mines to the factory premises and that duty paid on spares of rope way used for transporting of raw material from the mines to the factory premises are eligible for availing the Modvat credit. The Supreme Court noticed that identical issue came up for consideration before the CEGAT in J.K. Udaipur Udyog Ltd. v. CCE - 2002 (147) E.L.T. 996 and in that case the Tribunal held, following the principles laid down in Pepsico India Holdings Ltd., that the assessee was entitled to the Modvat credit. The Supreme Cou....
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....ry premises. 14.This stand of the Revenue was rejected by the Supreme Court on the ground that an identical issue had come up for consideration before CEGAT in J.K. Udaipur Udyog Ltd. v. CCE reported in 2002 (147) E.L.T. 996 wherein it was held that the assessee was entitled to the Modvat credit. 15.The said decision of CEGAT in J.K. Udaipur Udyog Ltd. was rendered in Appeal No. E/1344/2002-NB decided on 2-8-2002 [2002 (147) E.L.T. 996 (Tri. - Del.)]. It was a case in which captive mines were situated at a few kilometers away from the factory. The entire quantity of lime stone excavated was crushed at the mine site and the crushed lime stone was transported to factory for manufacturing. The Revenue has urged that since the rope ways are not installed in the factory, therefore, they cannot be treated as capital goods eligible for Modvat credit. The Tribunal relying on Pepsico India Holdings Ltd.'s case in which capital goods employed for the purpose of drawing water from the well situated away from factory premises and brought to the factory by transportation for use therein were held to be eligible for Modvat credit accepted the claim of J.K. Udaipur Udyog's in respect of afo....