M/S.Aditya Cement vs Cce, Jaipur-Ii

(Arising out of OIA No106(RDN)/CE/JPR-II/2012 and OIA No105(RDN)/CE/JPR-II/2012 dated 6.12.2012 passed by the CCE(Appeals), Jaipur)

Date of Hearing: 31.08.2015

Date of Order:04.09.2015

For approval & Signature:

Honble Smt.Sulekha Beevi C.S., Member (Judicial)

1. Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2. Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? No 3. Whether their Lordships wish to see the fair copy of the order? seen 4. Whether order is to be circulated to the Department Authorities? Yes

M/s.Aditya Cement Appellant

Vs.

CCE, Jaipur-II Respondent

Appearance:

Present for the Appellant: Ms.Sukriti Das, Advocate

Present for the Respondent: Shri B.B.Sharma DR

Coram: Honble Smt.Sulekha Beevi C.S., Member (Judicial)

Final Order No.52754-52755/2015

Per: Sulekha Beevi C.S.

The issue involved in these appeals is denial of credit on dumpers and its parts on the ground that these are neither inputs nor capital goods.

2. The appellants are engaged in the manufacture of cement and clinkers. The limestone is mined in appellants mines and crushed in the mining area. The crushed limestone is used in the manufacture of cement. Appellant uses The dumpers in the mining area to bring limestone in the mines to be fed into the crusher, so that limestone is crushed for carrying out further process of clinkerisation. According to appellants, the dumpers have direct nexus to the manufacturing activity and therefore would be covered by the definition of input, whereas credit on the excise duty paid on dumpers was denied by the department on the ground that the dumpers and their parts are not used in or in relation to the manufacture of final products. The disputed period is November 2010 to July 2011 (in appeal No.E/55758/2013) and July, 2010 to October, 2010 (in appeal No.E/55759/2013).

3. According to appellants, dumpers are used for transportation of limestone from the mining area to the limestone crusher within the mining area. The use of the dumpers within the mining area is not disputed. Credit has been denied by the department stating that there are motor vehicles classifiable under chapter 87 and chapter 40 of CETA, 1985 and are not covered under the definition of input.

4. The issue is no longer res integra and stands settled by the CESTAT in the case of CCE vs. India Cements Ltd.-2009 (238) ELT 193 (Tri.-Chennai). It was observed therein that the dumpers and excavators are used in mines for, or in connection with, mining of limestone, one of the raw materials required for manufacture of cement. Mines in which capital goods were used being integrally connected with the cement factory, these capital goods should also be considered to have been used for processes integrally connected with manufacture of final product. Further in Jindal Steel & Power Ltd. Vs.CCE, Raipur, the Tribunal vide Final Order No.52441/2015 dated 22.7.2015, has allowed credit on JO Trucks specially designed for transporting goods within the factory premises. The Apex Court in Vikram Cement vs. CCE-2006 (197) ELT 145 (SC) has held that Modvat/Cenvat credit is admissible on capital goods used in mines if mines are captive mines so that they constitute one integrated unit together with the concerned cement factory. Applying the ratio laid in the above judgements, I find that the denial of credit on the excise duty paid on dumpers and parts thereof is unjustified.

5. In the result, the impugned order is set aside and the appeals are allowed with consequential relief, if any.

(pronounced in the open court on 04/09/2015)

(Sulekha Beevi C.S.)

Member (Judicial)

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