VIKRAM CEMENT versus COMMISSIONER OF CENTRAL EXCISE, INDORE

Citation: [2005] SUPP. 2 S.C.R. 930 · Decided: 24-08-2005 · Supreme Court of India · Bench: B.P. SINGH, S.H. KAPADIA · Disposal: Matter referred to larger bench
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Judgment (excerpt)

A 
B 
VIKRAM CEMENT 
v. 
COMMISSIONER OF CENTRAL EXCISE, INDORE 
AUGUST 24, 2005 
[B.P. SINGH AND S.H. KAPADIA, JJ.] 
Central Excise Rules, 1944/CENVAT Credit Rules, 2001/CENVAT 
Credit Rules, 2002 : 
C 
R/57AA(d)lr. 2(f)/r.2(g)-"Jnput"-"Capital goods"-Assessee in the 
business of extracting lime stone and manufacturing cement-Claiming credit 
of duty paid on "inputs", namely explosives, lubricating oils and welding 
electrodes, as also on "capital goods", namely lime stone crusher, mining 
equipments etc. under CENVAT Rules, 2000, 2001and2002-Assessee taking 
D the stand that there was no difference between MODVAT Scheme and 
CENVAT Scheme as regards substantive definition of "input"-Court noticing 
observation in JK. Udaipur Udyog Ltd.*, to the effect that schemes for 
MOD VAT and CENVAT credits were different, and referring the matter to a 
larger Bench for reconsideration of the said case-Central Excise Tariff Act, 
E 
1985-Chapter 2 5. 
*Commissioner of Central Excise, Jaipur v. JK. Udaipur Udyog Ltd., 
(2004) 171 EL T 289, referred to. 
Jaypee Rewa Cement v. Commissioner of Central Excise, MP., (2001) 
F 133 ELT 3, cited. 
CfVIL APPELLATE JURISDICTION : Civil Appeal No. 1197 of2005. 
From the Judgment and Order dated 19.10.2004 ofthe Customs, Excise 
and Service Tax Appellate Tribunal, New Delhi in F.O. No. 1118/2004-NB-
G A in A. No. E/2928/2004-NB-A. 
WITH 
SLP (C) No. 23205/2003, C.A. Nos. 3422, 4120-4122, 4149-4153, 
H 7175-7189/2004 and C.A. Nos. 1613, 1815, 2318-2320 of2005. 
930 
VIKRAM CEMENT v. COMMR. OF CENTRAL EXCISE, INDORE 
931 
Joseph Vellapally, T. Mohd. YousufV. Lakshmikumaran, Alok Yadav, A 
Rajesh Kumar, Sanjay Grover, M.P. Devnath, Mathivanam, Mrs. Prabha 
Swami, Rupesh Kumar, T.A. Khan, Raghunath Kapoor, P. Parmeswaran, Ms. 
lndu Sharma and A. T. Rao for the appearing Parties. 
The following Order of the Court was delivered : 
In this group of civil appeals/special leave petition, question 
of admissibility of credit of the duty paid on "inputs" namely, 
explosives, lubricating oils and welding electrodes as also the question of 
admissibility of credit on "capital goods" namely, limestone crusher, mining 
equipment etc. under Cenvat Credit Rules, 2000, 2001 & 2002 arise for 
determination. 
Since common questions of law and fact arise for determina-
tion, the above civil appeals are clubbed together. For the sake of convenience, 
B 
c 
the facts in Civil Appeal No.1197 of 2005 are mentioned herein below. 
D 
Three show-cause notices dated 26.8.2000, 10.2.2003 and 29.1.2003 
were issued by the department to the assessee proposing to disallow the credit 
on aforestated items on the ground that they were used for extraction of 
limestone in the mines and not within the factory in which cement (final E 
product) was manufactured ·by the assessee. The assessee replied to each of 
the above three show-cause notices by which it submitted that the substantive 
definition of "input" as per clause (d) of rule 57 AA of Central Excise Rules, 
1944; rule 2(1) of the Cenvat Credit Rules, 2001 and rule 2(g) ofCenvat Credit 
Rules, 2002 was in pari-materia and was not different from the definition of 
"input" under erstwhile rules 57A and 578 of Central Excise Rules, !944. 
According. to the assessee, there was no difference between the Modvat 
scheme and the Cenvat scheme as far as the substantive definition of "input" 
was concerned. According to the assessee, the Cenvat scheme was more 
broad-based as compared to the earlier Modvat scheme. 
F 
G 
The assessees are engaged in the manufacture of cement and clinker 
falling under chapter 25 of Central Excise Tariff Act, 1985. They use 
explosives, welding electrodes, lubricating oil and crusher for extraction of 
limestone and crushing in the mines adjacent to the cement factory of the 
assessees. Being aggrieved by the order dated October 30, 2003 confirming H 
932 
SUPREME COURT REPORTS [2005] SUPP. 2 S.C.R. 
A the demand, the assessees preferred appeals to the Commissioner (Appeals). 
By order dated 27.2.2004, the Commissioner (Appeals) took the view 
that the Cenvat credit was admissible only when the inputs or the capital goods 
were used by the manufacturer within the factory premises and since the 
B above goods were used in the mines adjacent to the factory premises, the 
assessees were not entitled to the credit on the aforestated goods. 
c 
Aggrieved by the said order of the commissioner dated 27.2.2004, the 
assessees filed appeals before the Cu
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