Binding Tribunal precedent on Modvat credit cannot be ignored by a subordinate authority; contrary denial was set aside.

An authority subordinate to the Tribunal cannot disregard a binding Tribunal decision merely because it disagrees with that ruling. The Commissioner's order expressly departed from an earlier Tribunal view on Modvat credit eligibility where the dealer was unregistered, and that departure rendered the order unsustainable. Because the denial of credit rested entirely on the contrary order, the refusal of Modvat credit could not be maintained. The impugned order was therefore illegal and set aside, with consequential relief to the assessee.

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Issues: Whether the Commissioner could disregard and pass an order contrary to a binding decision of the Tribunal, and whether the impugned denial of Modvat credit could be sustained.

Analysis: The order under challenge expressly recorded disagreement with an earlier Tribunal ruling on the same issue of credit eligibility where the dealer was unregistered. An authority subordinate to the Tribunal's appellate jurisdiction is bound by the Tribunal's decision and cannot refuse to follow it on the ground of disagreement. Since the Commissioner proceeded in violation of this principle, the order was unsustainable. The denial of credit, being founded on that contrary order, could not survive.

Conclusion: The impugned order was illegal and was set aside, with consequential relief to the assessee.

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