ORDER
Archana Wadhwa, Member (J)
1. The respondents are absent in spite of today’s notice of hearing having been issued well in advance to them. Accordingly, I have heard Shri N.K. Mishra, learned S.D.R., for the Revenue.
2. The dispute in the present appeal of the Revenue relates to the availability of the Modvat credit under a chemical name – ’round up’ – used in tea bushes in the Tea Gardens. The Commissioner (Appeals) has allowed the Mod-vat credit in respect of the said chemical by observing that tea bushes are the principal raw materials and the quality and quantity of their tea is dependent on the quality and quantity of tea bushes. Hence, the said chemical is used in relation to the manufacture of the final product which is tea and the benefit of credit is available. She has also referred to the earlier Orders passed by her, wherein the benefit of credit in respect of insecticides, pesticides and weedicides used by Tea Industry for protecting the tea bushes which are their main raw materials; was extended by her.
3. I find that the earlier Orders passed by the Commissioner (Appeals) referred in the impugned Orders were set aside by the Tribunal in the case of Commissioner of Central Excise, Shillong v. Namdang Tea Estate, vide Tribunal’s Order No. A-859/KOL/2001, dated 7-9-2001. The Tribunal has observed as under :-
“5. I fully agree with the Revenue’s stand that the various chemicals, insecticides, fertilizers, etc., used for production of green tea plant outside the factory premises in the tea garden can, by no stretch of imagination, be considered as inputs used in or in relation to the manufacture of final product i.e. tea. The process of manufacturing tea starts with bringing green tea leaves into the factory premises and as such it is the green tea leaves which are the main input for the manufacture of tea. The materials used for growing such inputs that too outside the factory premises cannot be held to be inputs used in relation to the final product. The ratio of the Tribunal’s decision in Jaypee Rewa Cement applies to the present case. As such, I set aside the impugned Order of the Commissioner and allow the Revenue’s appeal.”
4. Shri N.K. Mishra, learned J.D.R., for the Revenue submits that though the Tribunal’s decision in the case of Jaypee Rewa Cement has been set aside by the Hon’ble Supreme Court as reported in 2001 (133) E.L.T. 3 (S.C.), but he seeks to distinguish the same on the ground that in that case, limestone for which explosives were used in the mine, was considered as intermediate product, whereas in the instant case, the tea bushes for which the chemical in question is used, are the principal, raw materials, as admitted even by the Commissioner (Appeals) in her impugned Order. As such, the ratio of the Supreme Court decision in the case of Jaypee Rewa Cement is not applicable.
5. I fully agree with the above contention of the learned J.D.R. The Tribunal has already observed in the above-referred decision, that various chemicals, insecticides, fertilizers, etc., used for production of green tea plant outside the factory premises in the tea garden cannot be considered as the starting point of the manufacturing process. As such, the Modvat credit would not be available to the chemicals in question used in the tea gardens. Revenue’s appeal is accordingly allowed.