G.C.R. No.6 of 1999 -1-
In the High Court of Punjab and Haryana at Chandigarh
G.C.R. No.6 of 1999
Date of decision: March 4, 2009
Commissioner of Central Excise, Chandigarh .....Petitioner
versus
Modern Steels Limited ....Respondent
Coram: HON’BLE MR. JUSTICE M.M. KUMAR
HON’BLE MR. JUSTICE H.S. BHALLA
Present: Mr. Sanjeev Kaushik, Sr. Standing Counsel
(Indirect Taxes), for the petitioner.
Mr. O.P. Goel, Senior Advocate, with
Mr. Varun Sharma, Advocate,
for the respondent.
1. Whether Reporters of local papers may
be allowed to see the judgment?
2. To be referred to the Reporters or not?
3. Whether the judgment should be reported in the Digest?
M.M. KUMAR J.
At the instance of the revenue an application under Section 35G
(1) (as it stood in 1997) of the Central Excise Act, 1944 ( for brevity the
Act) was filed before the Custom Excise and Gold (Control) Appellate
Tribunal, New Delhi (for brevity the Tribunal) claiming that various
question of law would arise from the order of the Tribunal dated 21.10.1997
holding that modvat credit is admissible to the Dealer-Assessee on inputs
which are styled as refractory materials. The Tribunal also set aside the
order of Adjudicating Officer, denying modvat credit on the said items. On
the application filed by the revenue, the Tribunal has referred the following
G.C.R. No.6 of 1999 -2-
question of law for determination of this Court which reads as under:-
“Whether Modvat credit under Rule 57-A of
Central Excise Rules, 1944 is admissible to the refractory items
namely, refractory bricks, refractory cement and high alumina
refractory cement which are construction material used in
lining the furnance and essential parts of furnance and are not
used in or in relation to the manufacture of final product i.e.
Steel ingots”
At the outset, learned senior counsel for the respondent-
assessee has argued that the aforementioned question of law has already
been considered by two Division Benches of this Court in the cases of
Collector of Central Excise, Chandigarh v. Zenith Papers, 2002 (146)
E.L.T. 518 (P & H) and Oswal Steels v. Collector of Central Excise,
New Delhi, 2006 (193) E.L.T. 403 (P & H).
According to the learned Senior counsel both the Division
Benches have interpreted Rule 57-A of the Central Excise Rules, 1944 to
include various items as input for the final product viz. Fire Bricks, Mortar,
Orcast, Castable Refractories etc. In the present case, the question is
similar. The refractory items involved in the instant case are refractory
bricks, refractory cement and high alumina refractory cement. Therefore, it
has been argued that the matter is covered by the above mentioned two
Division Benches of this Court.
Mr. Sanjeev Kaushik, learned counsel for the revenue-
petitioner could not successfully dispute the ratio of the two judgments and
the fact that the similar question of law has been answered by the two
Division Benches against the revenue. Accordingly, it is held that the
refractory bricks, refractory cement and high alumina refractory cement
which are otherwise construction material would be covered for granting
G.C.R. No.6 of 1999 -3-
benefit of Cenvat Credit and such goods are to be regarded as inputs used in
all or in relation to the manufacture of the final product i.e steel ingots.
In view of the above the question is answered against the
revenue and in favour of the Dealer-Assessee.
( M. M. KUMAR )
JUDGE
( H.S. BHALLA )
JUDGE
04.03.2009
A.Kaundal