i) Hydraulic Excavator, Dumpers, Steel Plates used for manufacture of Ducts, Steel Castings - HCI and CI Castings, Steel Plates and Sheets, Steel Castings Gisly Bars and Furnace Oil, Lubricating Oil and Lubricating Grease.

2. The learned lower authority has held that the benefit of the MODVAT credit either under Rule 57A or Rule 57Q as the case may be, as claimed by the appellants is not available. The learned lower authority has recorded his findings in respect of each of the items separately.

3. The learned Advocate has adduced his arguments in respect of the goods in question as under :

i) HYDRAULIC EXCAVATOR

The learned Advocate has pleaded that the same is used in the mine which is adjacent to the factory for mining the limestone which is ultimately loaded on the dumpers and brought to the factory for use within the factory. At the outset, on a query from the Bench, he has fairly conceded that this cannot be taken to have been for producing, manufacturing or process of any goods for being considered as inputs in terms of Rule 57Q. He has pleaded, he is restricting for claim under Rule 57A. He has pleaded that the definition of the capital goods as set out in Rule 57Q similar to the category of the excluded goods from the provision of Rule 57A. If these are taken to be excluded from the provision of capital goods from Rule 57Q, these, therefore, automatically will not come within the purview of excluded goods under Rule 57A. He has pleaded that for the purpose of the benefit of Rule 57A, the mine and the factory should be considered as one unit. He has pleaded that the mining of the limestone and the transport of the same is intended for use of the limestone in the appellants factory where the cement is manufactured. He has pleaded, therefore, these two items should be treated as an input for the purpose of manufacture of the cement. He has in this connection referred us to the definition of factory as set out under Section 2 (e) of the Central Excise Act. This definition is reproduced below for convenience of reference:

"factory" means any premises, including the precincts thereof, wherein or in any part of which excisable goods other than salt are manufactured, or wherein or in any part of which any manufacturing process connected with the production of these goods is being carried on or is or ordinarily carried on;

He has highlighted that the definition included not only the place where the goods which are manufactured but also the precincts thereof, where a manufacturing activity is carried out. He has pleaded that the mining of the limestone should be taken to be a manufacturing activity and, therefore, the extended definition of factory should be applied for the purpose of giving the benefit under Rule 57A.

4. The learned SDR for the department has pleaded that the excavator, dumper are used for the mining activity and transport of the limestone from outside the factory. He has pleaded that the activity carried out, therefore, can be only considered to be in relation to the limestone and not to the manufacture of the cement. He has pleaded that the products of the mining industry are exempted and, therefore, use, if any, will have to be considered with reference to the finished product which is exempt and in terms of Rule 57A, the MODVAT credit in respect of this cannot be allowed.

5. We have considered the pleas made by both the sides. We observe that the first point that falls for consideration is whether the mine and cement factory can be considered as one unit. We observe that mining activity is a separate activity carried out under the Mines Act and the cement factory functions under the Factory Act. The excise license for the cement factory would include only such of those areas w