Exemption for railway-sourced inputs followed binding precedent, while contrary authority was distinguished on different facts and notification.

Exemption under Notification No. 202/88-C.E. was available for products manufactured from rails, wheels, fish plates and similar materials purchased directly from the Railways because the governing issue was already covered by the Allahabad High Court in Lakshmi Rolling Mills, a view confirmed by the Supreme Court. The contrary ruling in Elphinstone Metal Rolling Mills was distinguished as it concerned a different notification, and Mohan Steels Ltd. was held inapplicable because it involved scrap bought from kabaries rather than direct railway purchases. The article concludes that the binding higher-court view governed entitlement to the exemption and supported consequential relief.

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Issues: Whether the appellant was entitled to exemption under Notification No. 202/88-C.E. on products manufactured from rails, wheels, fish plates and similar materials purchased directly from the Railways, and whether the impugned order denying such exemption was sustainable.

Analysis: The dispute was held to be covered by the earlier decision of the Allahabad High Court in Lakshmi Rolling Mills, which treated materials purchased from the Railways as duty paid for the purpose of the exemption. That view had also been confirmed by the Supreme Court. The contrary decision in Elphinstone Metal Rolling Mills was distinguished as it concerned a different notification and could not govern the present claim. The Tribunal also found that its earlier decision in Mohan Steels Ltd. was inapplicable because it related to scrap purchased from kabaries and not directly from the Railways.

Conclusion: The appellant was entitled to the exemption under Notification No. 202/88-C.E., and the impugned order was unsustainable.

Final Conclusion: The appeals succeeded and the assessee obtained the claimed exemption with consequential relief.

Ratio Decidendi: Where the governing exemption issue is already covered by a higher judicial determination on materially similar facts, and the cited contrary authority concerns a different notification or materially different factual setting, the earlier binding view governs entitlement to the exemption.

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