TMI Blog2012 (9) TMI 309X X X X Extracts X X X X X X X X Extracts X X X X ..... effect of sub-rule (1) will stand terminated in respect of fuel-inputs which do not fall in sub-rule (2). Therefore, sub-rule (1) shall apply in respect of goods used as fuel and on such application, the credit will not be permissible on such quantity of fuel which is used in the manufacture of exempted goods. In view of the fact that fuel was used for generation of steam or electricity and these are not final products but intermediate products, the restrictions are not applicable and they are covered by the phrase for any other purpose. The Hon ble Supreme Court has taken the view that if the fuel is used for the manufacture of non dutiable final product, credit is not eligible. It may be seen that the Tribunal had not considered the provisions of Rule 6 and had also not considered the fact that Rule 6(1) is the plenary rule. The decision of the Apex Court in the GNFC [2009 (8) TMI 15 - SUPREME COURT] was rendered on 17.08.09 whereas the decision in the assessee's own case was rendered on 16.07.08. Not only the decision of the Apex Court in GNFC was subsequent to the decision in the assessee's own case but also in the case of GNFC, Apex Court had considered the relevant prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nciples of law applicable to the legal problems disclosed by the facts. He relies on the decision of the Hon ble Supreme Court in Dalbir Singh Ors. Vs. State of Punjab AIR 1979 SC 1384 in support of his submission that the ratio decidendi in the case of GNFC would not be applicable to their case. He submits that the decisions in the case of GNFC and in the case of appellant were based on the arguments placed before the Hon ble Supreme Court and the decision in the case of GNFC cannot be disturbed unilaterally just because the GNFC case was not argued the way G.S.F.C. case was argued. Further, he would submit that the principle of res-judicata will apply and relies upon several decisions in support of his submission. 3.2 Further he also submits that the reliance of the Revenue on the decision in the case of C.K. Gangadharan Vs. Commissioner of Income Tax 2008-TIOL-140-SC-IT-LB is also not relevant since subsequently Hon ble Supreme Court in the case of J.K. Charitable Trust 2008 (232) ELT 769 (S.C.). took the view that if a decision has been given in the case of the appellant himself the decision will be binding in respect of the same appellant. 3.3 He also submits that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h is against the appellant should prevail. He also relies upon the decision in the case of Hira Cements 2006 (194) ELT 257 (S.C.) to submit that the issue has attained finality only as regards the period covered by the decision of the Apex Court earlier. In this case Hon ble Supreme Court has taken a view that if an appeal has been decided on the ground that Revenue had accepted a judgment earlier, it cannot be treated as res-judicata. In the case of BSNL 2006 (2) STR 161 (S.C.), Hon ble Supreme Court had taken a view that res-judicata does not apply in matters pertaining to tax for different assessment years. The Hon ble Supreme Court also observed that where facts and law in a subsequent assessment year are the same, no authority whether quasi judicial or judicial can generally be permitted to take a different view. However, the Apex Court observed that this mandate is subject to only to the usual getaways of distinguishing the earlier decision or where the earlier decision is per in curium. Therefore, in this case since the earlier decision of the Hon ble Supreme Court was on the ground that department had not filed appeal in the case of Raymond Ltd. and subsequently Hon ble Sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted that the decision of the Apex Court upholding eligibility for credit in their own case for the period from September 1997 to January 1998 has to be treated as final and in spite of the decision to the contrary of the Apex Court in the case of GNFC (supra) cannot be considered. We proceed to examine the decision of the Apex Court in the case of appellants themselves. 8. Before we proceed, we have to consider the decision of the Tribunal in the case of Raymond Ltd. (supra) in view of the fact that Apex Court had allowed the credit for the appellant on the ground that in terms of the decision of the Tribunal in the case of Raymond Ltd. as regards the credit is applicable since department had accepted the decision of the Tribunal and had not filed an appeal. 9. Paragraph 12 of the decision of the Tribunal in the case of Raymond Ltd. is relevant and accordingly is reproduced below: 12.What then is the meaning of the term for any other purposes contained in the relevant clause in the amended rule? If the object were to limit the use of the fuel only to manufacture of finished dutiable product, these words would become unnecessary; even without them credit would be t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manufacture of final products or for any other purpose, within the factory of production. The Tribunal decided the case in favour of the Assessee relying upon a decision of the Tribunal in the case of Raymond Ltd. v. Commissioner of Central Excise, Mumbai III, 2000 (37) RLT 447 (CEGAT), wherein it has been held that the Modvat credit would be available on inputs used to manufacture steam which was in turn used for manufacture of exempted or nil duty rated final product or for any other purpose. It is stated before us that no appeal has been preferred by the Revenue against the decision in the aforesaid case. The same has thus become final. 10. . As regards the second issue involved in the case, the Revenue has accepted the decision in the case of Raymond Ltd. (supra), as it did not file any appeal against the said decision in this Court. The second issue is already decided in favour of the Assessee. The decision rendered by the Tribunal is, thus, confirmed. The appeal is dismissed leaving the parties to bear their own costs. 11. From the above it can be seen that the Apex Court did not consider or discuss the legal provisions or facts in detail except to observe that sin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the earlier case. 13. It was observed by the Apex Court that as regards (i) findings of material facts, it is the material element in the decision and it determines the parties from reopening the dispute . The statements on the principles of law applicable to the legal problems disclosed by the facts would form the ratio decidendi according to the Apex Court. 14. The ld. A.R. on behalf of the Revenue relied upon the decision in the case of Hira Cements (supra). In the case of Hira Cements, the Commissioner had dropped proceedings by order dated 21.09.01 as regards valuation of goods and use of brand name. An appeal was filed against penalties imposed which was dismissed. In that situation, it was the claim of the Hira Cements that as regards SSI exemption and valuation, the order dated 21.09.01 attained finality since it had been accepted by the appellant. It was argued before the Apex Court that once the order dated 21.09.01 attained finality, Revenue did not have any locus standi to maintain an appeal since a finding had been arrived by the Commissioner as well as the Tribunal to the effect that it is not the (Hira Cements) who had been using the brand name of the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent year should be set aside, but that it should be overruled as an authority or precedent. Therefore, the decisions in Devi Lal Modi v. Sales Tax Officer (supra) and in Hurra v. Hurra (supra) are not germane. 20. A decision can be set aside in the same lis on a prayer for review or an application for recall or Under Art. 32 in the peculiar circumstances mentioned in Hurra v. Hurra. As we have said overruling of a decision takes place in a subsequent lis where the precedential value of the decision is called in question. No one can dispute that in our judicial system it is open to a court of superior jurisdiction or strength before which a decision of a Bench of lower strength is cited as an authority, to overrule it. This overruling would not operate to upset the binding nature of the decision on the parties to an earlier lis in that lis, for whom the principle of res judicata would continue to operate. But in tax cases relating to a subsequent year involving the same issue as an earlier year, the court can differ from the view expressed if the case is distinguishable or per incuriam. The decision in State of U.P. v. Union of India related to the year 1988. Admittedly, the pres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no decision on merits or settling legal principles. In this case as can be seen from the decision of the Tribunal in the case of Raymond Ltd. and the decision of the Apex Court in the case of GSFC relying upon Raymond Ltd. reproduced above, it becomes quite clear that Apex Court did not go into the legal aspects in detail at all. Since the facts leading to the dispute and the decision given by the Tribunal were not appealed against, the Apex Court did not feel the need for going into the merits at all and on that ground the decision was given in favour of the appellant. In view of the decision in the case of BSNL and Hira Cements and also in view of the decision in the case of GNFC by the Apex Court subsequently, the department is definitely free to reopen the assessment if the view taken in GNFC case is contrary. In the GNFC, the Apex Court considered the appeals filed by four assessees and had taken the facts in the case of GNFC for coming to a conclusion. The facts in GNFC case and in the case of the present appellant are the same. The Hon ble Supreme Court had reproduced the relevant rules during the relevant period and had considered the submissions and thereafter came to a co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll not be permissible on such quantity of fuel which is used in the manufacture of exempted goods. In our view, the above aspect has not been properly appreciated by the Gujarat High Court in the above case of M/s. Gujarat Narmada Valley reported in 2006 (193) E.L.T. 136 (supra). 19. We have already observed that the Tribunal while considering the issue in Raymond Ltd. had taken the view that in view of the fact that fuel was used for generation of steam or electricity and these are not final products but intermediate products, the restrictions are not applicable and they are covered by the phrase for any other purpose . The Hon ble Supreme Court has taken the view that if the fuel is used for the manufacture of non dutiable final product, credit is not eligible. It may be seen that the Tribunal had not considered the provisions of Rule 6 and had also not considered the fact that Rule 6(1) is the plenary rule. Since in the case of GNFC, the Hon ble Supreme Court settled principles of law applicable to the legal problems disclosed by the facts, it leads to a clear ratio decidendi as observed in the case of Dalbir Singh Ors (supra). Therefore the decision in the case of GNFC h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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