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TMI Blog2012 (8) TMI 942X X X X Extracts X X X X X X X X Extracts X X X X ..... nvat credit of duty paid on LSHS used as fuel amounting to ₹ 34,36,60,312/- and interest of ₹ 3,13,62,988/-. No penalty was imposed. While passing the order, the ld. Commissioner did not follow the decision of the Tribunal upheld by the Honble Supreme Court in the appellants own case on the ground that in a subsequent decision, the Apex Court in the case of Gujarat Narmada Fertilisers Ltd. (GNFC) - 2009 (240) ELT 661 (S.C.) has held that GNFC is not eligible for cenvat credit of duty paid on LSHS used in the manufacture of steam which was in turn used in the manufacture of fertilisers on the ground that such facility is not available in terms of provisions of Rule 6 of Cenvat Credit Rules. 3. Ld. counsel on behalf of the appellants submitted that the ratios of decisions in the case of appellant and GNFC are entirely different and can be said to be poles apart. He submits that Commissioner cannot ignore a decision in the case of the same appellant in preference to some other partys case and that too when the ratio is totally different. 3.1 The ratio decidendi consists of statement of principles of law applicable to the legal problems disclosed by the facts. He r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant on the decision of the Tribunal in the case of Ballarpur Industries Ltd. - 2000 (116) ELT 312 (Tri.) is also not appropriate since the Apex Court themselves observed that the issue in the case of Ballarpur Industries Ltd. was different. In the case of Ballarpur Industries Ltd. the issue dealt with was whether credit could be availed on LSHS even prior to 16.3.95 when clause (d) of Rule 57A covering inputs used as fuel for generation of steam or electricity under explanation of Rule 57A was introduced. He submits that since Apex Court simply allowed the appeal filed by the appellant on the ground that the decision of the Tribunal in the case of Raymond Ltd. on the same issue had been accepted by the Government and did not consider the merits of the case nor did it discuss the issue in detail by considering the legal principles, it cannot be binding in view of the fact that in the case of GNFC, Hon ble Supreme Court was examining the provisions of Rule 6(1) and Rule 6(2) of the Cenvat Credit Rules which are pari materia to the earlier rules as existed from time to time, the decision in the case of GNFC which is against the appellant should prevail. He also relies upon the dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missible. There is also no dispute that in spite of amendments of Rules from time to time during the period under consideration, the provisions have remained the same as regards disallowance of credit in certain circumstances as provided under Rule 57C. According to Rule 57C of Central Excise Rules, 1944, no credit of specified duty shall be allowed on such quantity of inputs which is used in the manufacture of final products which are exempt from the whole of duty of excise leviable thereon or chargeable to nil rate of duty except when the final products are ---- (omitted since not relevant). 6. The issue that arises is whether the definition of input as provided under Rule 57B(iv) as in existed up to 31.3.2000 and Rule 57AB of Central Excise Rules, 1944 as in existed up to 30.06.2001 according to which cenvat credit is available when the input is used as fuel or for generation of steam or electricity used for manufacture of final products or for any other purpose would prevail in spite of provisions of Rule 57C which provides credit subject to certain conditions. 7. Ld. counsel for the appellants submitted that the decision of the Apex Court upholding eligibility for credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ighed with the Tribunal to render this decision was the fact that steam or electricity was the intermediate product and not the final product according to the decision. It was this decision which was not appealed against by the department and the Hon ble Supreme Court while considering the appeal filed by the appellant in their own case, identified two issues to be decided as submitted by the ld. D.R. The first issue was decided by the Tribunal-LB in the case of Ballarpur Industries Ltd. The issue involved was whether credit on steam or electricity would not be available prior to 16.03.95 the duty on which credit was specifically made available to the fuel used for generation of steam or electricity. That issue did not arise in the case of GSFC-the appellant. As regards the second issue which was whether credit is available in respect of fuel used for production of steam, the Hon ble Supreme Court observed as follows: 9.On the second contention raised by the Respondent, namely, that as per Rule 57B(1)(iv), the Modvat credit was available on the inputs used for generation of electricity or steam, used for manufacture of final products or for any other purpose, within the factory ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n to the subject that estops the parties from reopening the dispute. However, for the purposes of the doctrine of precedents, ingredient No. (ii) is the vital element in the decision. This indeed is the ratio decidendi. (5) It is not everything said by a Judge when giving judgment that constitutes a precedent. The only thing in a Judges decision binding a party is the principle upon which the case is decided and for this reason it is important to analyse a decision and isolate from it the ratio decidendi. In the leading case of Qaulcast (Wolverhampton) Ltd. V. Haynes 1959 AC 743 it was laid down that the ratio decidendi may be defined as a statement of law applied to the legal problems raised by the facts as found, upon which the decision is based. The other two elements in the decision are not precedents. The judgment is not binding (except directly on the parties themselves), nor are the findings of facts. This means that even where the direct facts of an earlier case appear to be identical to those of the case before the Court, the Judge is not bound to draw the same inference as drawn in the earlier case. 13. It was observed by the Apex Court that as regards (i) findings of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urts have held parties to the opinion expressed in a decision in one assessment year to the same opinion in a subsequent year is not because of any principle of res judicata but because of the theory of precedent or the precedential value of the earlier pronouncement. 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. This mandate is subject only to the usual gateways of distinguishing the earlier decision or where the earlier decision is per incuriam. However, these are fetters only on a coordinate bench which, failing the possibility of availing of either of these gateways, may yet differ with the view expressed and refer the matter to a bench of superior strength or in some cases to a bench of superior jurisdiction. 19. In our opinion, the preliminary objection raised by the State of U.P. therefore, rests on a faulty premise. The contention of the petitioners/appellants in these matters is not that the decision in State of U.P. v. U.O.I (supra) for that assessment year should be set aside, but that it should be overruled as an authority or precedent. Therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is case. 18. We find considerable force in the arguments advanced by the ld. A.R. As regards res-judicata, the observations of the Hon ble Supreme Court in the case of BSNL are squarely applicable. The department is not reopening the assessment for the period from September 1997 to January 1998 which has attained finality with the decision of the Apex Court. For subsequent period, the question that is to be considered is whether it can be said that the decision of the Apex Court can be said to have provided a ratio decidendi. Obviously as submitted by the ld. A.R. in the case of Hira Cements, the Honble Supreme Court has taken a view that if a decision has been taken and accepted it would not bar the Revenue for reopening the issue for a subsequent period. Moreover, the observations of the Honble Supreme Court in the case of BSNL and the paragraphs reproduced above are also very relevant to the issue. Just because the assessment for one period is completed, the Revenue is not barred from not following the decision relating to that period for subsequent period if there is no decision on merits or settling legal principles. In this case as can be seen from the decision of the Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exclusion of fuel-input vis-a-vis non-fuel-input would still fall in sub-rule (1). As stated above, sub-rule (1) is plenary, hence, it cannot be said that because sub-rule (2) is inapplicable to fuel-input(s), CENVAT credit is automatically available to such inputs even if they are used in the manufacture of exempted goods. The cumulative reading of sub-rules (1) and (2) makes it abundantly clear that the circumstances specified in sub-rule (2), which inter alia requires separate accounting of inputs, are not applicable to the fuel-input(s). However, the said sub-rule (2) nowhere says that the legal effect of sub-rule (1) will stand terminated in respect of fuel-inputs which do not fall in sub-rule (2). In other words, the legal effect of sub-rule (1) has to be applied to all inputs including fuel-inputs, only exception being non-fuel-inputs, for which one has to maintain separate accounts or in its absence pay 8% /10% of the total price of the exempted final products. 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 our v ..... X X X X Extracts X X X X X X X X Extracts X X X X
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