Binding precedent controlled Cenvat credit on imported capital goods and penalty, leading the HC to follow earlier Revenue-favouring rulings.

Where the questions on Cenvat credit for imported capital goods under Rule 57Q(3) and on penalty were identical to those already decided by a binding Division Bench precedent, the Karnataka HC followed that earlier ruling and answered both issues in favour of the Revenue. The claim to Cenvat credit was not sustained, and the Tribunal's setting aside of penalty was also not upheld. The appeal was consequently allowed, and the Tribunal's order was set aside, subject to the stated pending special leave petition.

---

---

Issues: (i) Whether Cenvat credit could be allowed on imported capital goods in view of Rule 57Q(3) of the Central Excise Rules, 1944. (ii) Whether the Tribunal was justified in setting aside the penalty.

Issue (i): Whether Cenvat credit could be allowed on imported capital goods in view of Rule 57Q(3) of the Central Excise Rules, 1944.

Analysis: The questions raised in the appeal were held to be identical to those already decided by a Division Bench in earlier proceedings involving the same statutory provision and the same nature of credit claim. The earlier decision had answered the question against the assessee and in favour of the Revenue.

Conclusion: The claim to Cenvat credit was not accepted and the issue was answered in favour of the Revenue.

Issue (ii): Whether the Tribunal was justified in setting aside the penalty.

Analysis: The penalty issue also stood covered by the earlier Division Bench ruling, which had upheld the Revenue's position. The present appeal was disposed of on the same reasoning and result, subject to the outcome of the pending special leave petition.

Conclusion: The setting aside of penalty was not sustained and the issue was answered in favour of the Revenue.

Final Conclusion: The appeal succeeded, and the Tribunal's order was set aside by following the earlier binding decision on the same questions of law.

Ratio Decidendi: Where the questions of law are identical to those already decided by a binding precedent of the same court, the later appeal must be disposed of consistently with that precedent, and the corresponding claim for Cenvat credit under Rule 57Q(3) cannot be sustained.

---