LAW FOR ALL

CENVAT Rules, 2000-Central Excise Rules, 1944-Rules 57AA, 57AB and 57AC and erstwhile Rules 57A to 57J-CENVAT credit-On input used outside factory-Explosives (input) used in quarrying limestone which in turn used for manufacturing cement (final product) in factory situated at some distance away from the limestone mines-Held: Qualifies for CENVAT credit-Earlier decision in Jaypee Rewa Cement, that MODVAT was allowable on use of explosives in manufacture of cement irrespective of the fact that explosives were used directly in limestone mines and never entered factory of manufacturer of cement, equally applies to CENVAT Rules which replaced the MODVAT Rules-Scheme of CENVAT credit no different in substance from MODVAT Rules. Modified Value Added Tax Scheme (MODVAT) was introduced in 1986 granting credit of excise duty on inputs used in or in relation to the manufacture of final products. The scheme was contained in Rules 57A to 57J of the CentralExcise Rules, 1944. In *Jaypee Rewa Cement where the input in question was explosives used in quarrying limestone which in turn were used in manufacture of cement, a three Judges Bench of this Court had held that MODVAT was allowable on the use of explosives in manufacture of cement irrespective of the fact that explosives were used directly in limestone mines and never entered factory of the manufacturer of cement. The MODVAT Rules were subsequently replaced by the CENVAT Rules. A Division Bench of this Court in **J.K. Udaipur Udyog held that the decision in Jaypee Rewa Cement did not apply to the CENVAT Rules. That view was doubted by a Co-ordinate Bench of this Court whereupon a reference was made to the present three Judges Bench for deciding the question whether the decision in Jaypee Rewa Cement would continue to apply to the CENVAT Rules, 2000.=PETITIONER: M/s Vikram Cement RESPONDENT: Commnr. Of Central Excise, Indore= 2006 (Jan.Part ) judis.nic.in/supremecourt/filename=27426