Reversal of credit for exempt by-product gas rejected where binding Supreme Court authority governed the dispute.

Blast furnace gas cleared as a by-product and exempt from excise duty under Notification No. 76/86 did not warrant reversal of credit or payment under Rule 57AD(2)(b) where the dispute was already governed by binding Supreme Court authority. The Tribunal applied that precedent and held the refund claim maintainable, rejecting the Revenue's challenge. The appellate challenge accordingly failed, and the cross-objection was disposed of on the same basis.

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Issues: Whether the amount paid under Rule 57AD(2)(b) of the Central Excise Rules, 1944 on clearance of blast furnace gas, treated as a by-product, was refundable in view of the Supreme Court decision governing reversal of credit attributable to inputs used in its manufacture.

Analysis: The demand arose from clearance of blast furnace gas generated in the manufacture of sponge iron and steel products, the gas being exempt from excise duty under Notification No. 76/86 dated 10/2/86. The controversy turned on whether the assessee was required to reverse credit or pay an amount on such by-product. The Tribunal held that the issue stood squarely covered by the Supreme Court decision relied upon, which settled the legal position against the Revenue's stand.

Conclusion: The refund claim was maintainable and the Revenue's challenge failed; the finding was in favour of the assessee.

Final Conclusion: The appellate challenge did not survive once the governing Supreme Court authority was applied, and the cross-objection was also disposed of accordingly.

Ratio Decidendi: Where the dispute is covered by binding Supreme Court authority on treatment of a by-product and reversal of credit, the appellate forum must apply that ratio and grant the consequential relief.

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