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Regarding eligibility of explosives (Chapter 36) for exemption from duty
under Notification No. 191/87-CE
Circular
No. 1 dated 5th January 1994
I
am directed to say that doubts have been expressed as to whether explosives when
used in blasting mines for the purpose of manufacture of copper. Zinc or Lead
concentrates would be entitled for exemption under Notification No. 191/87-CE
dated 4.8.87.
2.
In the matter C.C.E, Jaipur, relying on the judgment of Supreme Court in
the case of M/s. J.K. Cotton, Spinning & Weaving Mills Company Limited v.
S.T.O. [1965 SCR 900} had argued that explosives used for blasting of mines in
the manufacture of copper, zinc or lead concentrates are entitled for the
benefit of exemption in terms of notification No. 191/87-CE dated 4.8.87.
3.
The matter has been examined. In this connection it is pointed out that
Supreme Court in that case was interpreting the provisions of Sales Tax Laws
relating to commodities covered by the expression which the registered dealer
"may purchase when such goods are intended for use by him as raw material,
processing materials, machinery, plant, equipment, tools, stores, spare parts,
accessories, fuel or lubricants in the manufacture of processing of goods for
sale or in mining or in the generation or distribution of electricity or in
other form of power."
4.
The Supreme Court while interpreting the aforesaid entry had made certain
observation relating to manufacture of goods in connection with manufacture or
in relation to manufacture etc. to give effect to the statutory provisions. This
interpretation of the law cannot be made applicable to the facts and
circumstances of the present case as:
(i)
The law relating to excise on manufacture is distinct and different.
(ii)
The terms in or in relation to the manufacture of goods stand interpreted
with reference to the
caseof Empire Industry,Ujagar Prints etc., and
(iii)
Excise is in relation to factory.
5.
Therefore it is clarified that the explosives which are not used in or in
relation to manufacture of Copper, Zinc or Lead concentrates etc. in the
"factory" will not be entitled for the concession under Notification
No.l91/87-CE dated 4.8.87. The expression "factory" hall have the same
meaning as given in Section 2(e) of the Central Excises & Salt Act, 1944.
6.
All pending assessments maybe finalised on the above basis. Lower field
formations may be advised
suitably. The trade may also
be informed accordingly.
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