Judgment

Kirpal, J.—CA Nos. 5340–5341/2000.

The appellants M/s. Jaypee Rewa Cement are manufacturers of cement in their factory at Raipur. Lime Stone is an essential raw material for the said manufacture, but in order to extract lime stone explosives are used for mining the same.

2. It is not in dispute that the explosives which are used are items falling under Chapter 36 of the Excise Tariff. On the said explosives, excise duty had been paid, but the lime stone which was extracted, though an excisable item, was exempt from payment of excise duty by reason of an exemption notification. In the manufacture of cement, the appellants claimed modvat credit in view of the provisions of Rule 57A of the Central Excise Rules.

3. The case of the appellants was that the explosives used in the mining operation must be regarded as inputs and in respect of which notification had been issued by the Central Government in the Official Gazette and credit should be allowed in terms of the said Rule. The excise authorities as well as the CEGAT did not accept the contention of the appellants. The Tribunal came to the conclusion that Rule 57F was applicable in this case as explosives had no