Cenvat credit precedent on furnace oil for job work was not automatically applicable under the changed rule wording.

Rule 6 of the Cenvat Credit Rules, 2002 was treated as materially different from the earlier Modvat provision, so the prior Tribunal ruling on furnace oil used by a job worker could not be applied automatically. The order noted that credit restrictions on inputs used in exempted goods, together with the exception in Rule 6(2), had to be examined in the changed statutory setting, and that the job-work exemption notification did not by itself resolve the issue. On that basis, the controversy was referred for consideration by a division bench and placed before the President for constitution of a larger bench.

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Issues: Whether the earlier Tribunal decision on Modvat credit for furnace oil used by a job worker under the then prevailing rule could be applied to Rule 6 of the Cenvat Credit Rules, 2002, and whether the question required consideration by a larger bench.

Analysis: The order noted that Rule 6(1) of the Cenvat Credit Rules, 2002 restricts credit on inputs used in exempted goods, subject to the exception in Rule 6(2), and observed that the rule is differently worded from the earlier Modvat provision considered in the cited precedent. It further noticed that the notification governing job-work exemption could not by itself resolve the issue in the face of the changed statutory setting. In view of this distinction, the earlier decision was not treated as automatically governing the present controversy without further examination.

Conclusion: The question was held to require decision by a division bench, and the matter was directed to be placed before the President for constitution of a larger bench.

Final Conclusion: No final adjudication on the substantive Cenvat credit dispute was rendered, and the matter was sent for consideration by a larger bench.

Ratio Decidendi: Where the governing credit provision is materially differently worded from an earlier Modvat rule, the applicability of an earlier precedent on input credit cannot be assumed and may warrant reference to a larger bench.

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