CMA Nos. 3688, 3689 and 3694 of 2014 and MP No. 1 of 2014. Case: The India Cements Ltd. Vs Customs, Excise and Service TAX Appellate Tribunal and Ors.. High Court of Madras (India)
| Case Number | CMA Nos. 3688, 3689 and 3694 of 2014 and MP No. 1 of 2014 |
| Counsel | For Appellant: C. Saravanan, Adv. and For Respondents: Rajnish Pthiyil, SCGSC and T. Chandrasekaran, SPC |
| Judges | R. Sudhakar and R. Karuppiah, JJ. |
| Issue | Excise |
| Judgement Date | February 06, 2015 |
| Court | High Court of Madras (India) |
Judgment:
R. Sudhakar, J.
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Aggrieved by the respective orders passed by the Tribunal in dismissing the appeals filed by it, the assessee is before this Court by filing the present appeals, by raising the following questions of law:-
i) Whether in the facts and circumstances of the case, the Appellate Tribunal was justified in denying modvat credit on inputs such as lubricants and grease used in the captive mines?
ii) Whether the impugned orders of the Appellate Tribunal can be sustained in the light of the decisions of the Apex Court in Vikram Cement- Vs- CCE (2006 (194) ELT 3 (SC) and Vikram Cements- Vs- CCE, Indore (2006 (197) ELT 145 (SC))?
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The short facts of the case are that the appellant/assessee is engaged in the manufacture of cement falling under Chapter 25 of the Central Excise Tariff Act, 1985. The appellant/assessee availed Modvat credit on certain capital goods/inputs which were used in its captive mines.
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Insofar as CMA No. 3688/2014 is concerned, a show cause notice dated 8.11.02 for the period between 1.12.2001 to 30.7.02, was issued on the appellant, by the Superintendent of Central Excise, seeking to deny credit to the tune of Rs.69,264/- on inputs such as lubricants and greases used in the mines and for the vehicles in the factory used in relation to manufacture. The appellant filed a detailed reply on 4.12.02 and written submission dated 28.3.03.
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Insofar as CMA No. 3689/2014 is concerned, a show cause notice dated 11.3.02 for the period between 1.3.2001 to 30.11.2001 was issued on the appellant, by the Superintendent of Central Excise, seeking to deny credit to the tune of Rs.2,44,320/- on inputs such as lubricants and greases used in the mines and for the vehicles in the factory used in relation to manufacture.
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Insofar as CMA No. 3694/2014 is concerned, a show cause notice dated 21.9.2000 for the period between 1.9.95 and 31.5.2000 was issued on the appellant, by the Addl. Commissioner of Central Excise, seeking to deny credit to the tune of Rs.18,35,002/- on inputs such as lubricants and greases used in the mines and for the vehicles in the factory used in relation to manufacture.
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The Department was of the view that Modvat/Cenvat credit on duty paid inputs is available only when the goods are used within the precincts of the factory premises for manufacture of notified final products. The adjudicating authority came to the conclusion, on interpretation of the relevant rules, that Modvat/Cenvat credit shall apply only when inputs are used within the factory. If it is used in the captive mines and outside the factory, it is not eligible for the credits. Accordingly, the respective adjudicating authority while confirming the demand/partly modifying the demand by its respective orders, imposed penalty as well on the appellant/assessee.
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Aggrieved by the said orders of the respective adjudicating authority, the appellant/assessee preferred appeals to the CIT (Appeals). The CIT (Appeals), in two of the appeals preferred by the assessee, held against the assessee confirming the order of the adjudicating authority, whereas in one other appeal, the CIT (Appeals) allowed the appeal in favour of the assessee.
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The assessee, aggrieved by the order of the CIT (Appeals) denying Modvat credit in respect of grease and lubricants used in the captive mines, filed two appeals to the Tribunal, while the Department, aggrieved by the order of the CIT (Appeals) in allowing the benefit of...
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