LexJAYPEE REWA CEMENT versus COMMISSIONER OF CENTRAL EXCISE, M.P.
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_ ... JA YPEE REWA CEMENT v. COMMISSIONER OF CENTRAL EXCISE, M.P. AUGUST 22, 2001 [B.N. KIRPAL, SHIVARAJ V. PATIL AND P. VENKATARAMA REDD!, JJ.] Excise Law: Central Excise r!w 57-J Rules: A B c Rule 57-A rlw 57~j-Scope and applicability of-Final product-Use of inputs for manufacture of-Excise duty on-Credit for duty paid on inputs- Entitlemenf to--Held: Inputs used in relation to manufacture of final product whether directly or indirectly are inputs for the purpose of R.57-A-Such D inputs need not be utilised within the factory premises nor be brought there at any point of time-Hence, manufacturer entitled to claim credit for duty paid on such inputs. Words and Phrases : "fnput"-Meaning of-Jn the context of Explanation to Rule 57-A of the Central Excise Rules. The appellant manufactured cement in its factory for which limestone was an essential raw material. But in order to extract limestone explosives were used for mining the same. E F The appellant contended before the Customs, Excise and Gold (Control) Appellate Tribunal that the explosives used in the mining operation must be regarded as inputs and claimed credit in respect of the excise duty on cement under Rule 57-A of the Central Excise Rules to the extent of excise duty paid G on explosives. The Tribunal came to the conclusion that Rule 57-F 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 facto~y. It was of the opinion that 39 H 40 SUPREME COURT REPORTS [2001] SUPP. 2 S.C.R. A by virtue of the said provision, Rule, 57-A cannot be extended to take in within its ambit any goods used outside the factory for production of the final product. Hence this appeal. The following questions arose before the Court:- B Whether in accordance with Rule 57-A read with Rule 57-J Modvat c Credit could be claimed by the appellant in respect of explosives used outside the factory premises in connection with manufacture of cement '! Is it necessary for the expiosives to be used within the factory premises where the manufacture of cement takes place ? Allowing the appeal, the Court HELD : 1. Rule 57-A of the Central Excise Rules shows that the notification is to specify the goods used in or in relation to the manufacture of the final product whether directly or indirectly. In the present case, inputs, D which are used in relation to foe manufacture even indirectly, would be regarded as an input for the purpose of Rule 57-A. Rule---57-A(I) docs not, in any way, specify that the inputs have to be utilised within the factory premises. The explanation contained in Rule 57-A is merely meant to enlarge the meaning or the word "input" and does not in anyway restrict the use of the inpnt within the factory premises nor does the said Rule 57-A require the E inputs to be brought into the factory premises at any point of time. [46-B-q 2. The reading of Rule 57-J leaves no manner of doubt that even in respect of inputs used in the manufacture of an intermediate product which product is tllen used for the manufacture of a final product, the manufacturer F would be allowed credit on the duty paid in respect of the input. On the explosives a duty had been paid and the appellant would be entitled to claim credit because the explosives were used for the manufacture of the intermediate product, namely, limestone which, in turn, was used for ihe manufacture of cement. 147-G-H; 48-AI G CIVIL APPELLATE JURISDICTION Civil Appeal Nos. 5340- 534 I of 2000. From the Judgment and Order dated 7 .6.2000 of the Customs Excise and Gold (Control) Appellate Tribunal, New Delhi in F.O. Nos. A/466-467/ H 2000-NB(DB) in A. Nos. E/436-37 of I 998-NB(DB). JAYPEE REWA CEMENTv. C.C.E. [KIRPAL, J.) 41 WITH C.A. Nos. 6133-35, 6293, 6932, 6900-6905, 7337-40, 7131-32, 7195- 7200/2000, 279-282, 1628, 1629-30, 2368, 2301, 2577, 2515, 1792, 3965- 3968, 4383, 3994-3995, 4263, 4784, 3992/2001, W.P. (C) Nos. 676/2000, 29,30 31 and 32/2001 and C.A. No. 6064/2001. A B Kailash Vasdev, V. Lakshmikumaran, M.P. Devanath, Alok Yadav, V.Balachandran, Jaideep Gupta, Ms. Gauri Rasgotra, Suman J. Khaitan, Praveen Kumar, U.A. Rana, Ms. Shalini Mittal, Mainal Bharti, Sanjay Grover, Rajesh Kumar, M. Gauri Shankar Murthy, Dileep Tandon, Pritesh Kapoor, B.K. Prasad, V. Sridharan and A.R. Madhav Rao for the appearing parties. C The Judgment of the Court was delivered by KIRPA
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