TaxTMI 
TaxTMI 
2005 (11) TMI 161
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.... and maintenance and they are not eligible for the benefit of the Modvat credit in respect of such items. 2. It is the contention of the learned Counsel that although the Larger Bench of the Tribunal, in the case of Jaypee Rewa Plant v. CCE, Raipur - 2003 (159) E.L.T. 553 (Tri.- LB), has held that the use of welding electrodes and the said gases are not used in relation to the manufacture of final product but were used in repair and maintenance. However, it is his submission that they overlooked the Punjab & Haryana High Court judgment rendered in the case of CCE, Chandigarh-II v. National Fertilizer Ltd., Bathinda & Anr. - 2002 (140) E.L.T. 372 (P. & H.) = 2002 (79) ECC 758 (P&H) wherein, after due analysis of a similar process of manufacture with regard to the grant of benefit of set off in terms of provision to Chapter 10 of the CE Rules, which is identical to the same benefit in Modvat Rules, has held that when a part of furnace oil is used in the manufacture of steam, which is further used in running the rotary equipments like turbines, generating sets, compressors, pumps, etc., then in the light of the Apex Court judgment rendered in the case of CCE, Calcutta-ll v. Eastend P....
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.... this Larger Bench has referred to the Apex Court judgment rendered in the case of Collector v. Ballarpur Industries Ltd. - 1989 (43) E.L.T. 804 (S.C.) and that of Collector v. Eastend Paper Industries Ltd. (supra). He submits that in the present case, the items used for welding the punctured pipes are placed in a better position than the use of lubricating oils and greases. Therefore, he submits that the Larger Bench judgment in the case of CCE v. Modi Rubber Ltd., the judgment of the Punjab & Haryana High Court and Supreme Court judgments rendered therein in fact overrules the findings recorded by the Jaypee Rewa Plant v. CCE (supra). 3. The learned SDR submits that the items cannot be considered as inputs. The definition of inputs would be those items which go into the manufacture of the final product. The process of welding of punctured pipes and the items used with regard to the said activity cannot be said to be used "in or in relation to the manufacture of the final products." 4. On a careful consideration of submissions made by both sides and on perusal of the entire judgments, it is seen from the Larger Bench judgment rendered in the case of Jaypee Rewa Plant v. CCE, Rai....
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....judgment rendered in the case of Dokka Samuel v. Dr. Jacob Lazarus Chelly - 1997 (4) SCC 478. It has also held that the High Court decision will prevail over the Tribunal decision even if it is a Larger Bench decision. It has also held that the decision of Apex Court will prevail under Article 141 of the Constitution. In the light of this observation, we have to see as to whether the ruling of Jaypee Rewa Plant is a good law or not. The Punjab & Haryana High Court, in the case of CCE, Chandigarh-II v. National Fertilizers Ltd. (cited supra) has held in paras 7 to 9 as follows: "7. We have considered the arguments of Mr. Sehgal. The steam generation and its ultimate generation of electricity is a part and parcel of the composite process, which produces the final product, i.e. fertilizer. For the effective running of any plant, maintenance and overhauling of the machinery is necessary. It is an integral part in the process of production. Similar question came up for adjudication before their Lordships of the Apex Court in Collector of Central Excise, Calcutta-ll v. M/s. Eastend Paper Industries Ltd., AIR 1990 SC 1893, where it was held "Where any particular process ................ ....
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....Supreme Court judgments noted therein, have not been referred to by the Larger Bench in the case of Jaypee Rewa Plant. Thus the findings rendered in the case of Jaypee Rewa Plant, denying the benefit of Modvat in respect of welding electrodes and Gases, is contra to the judgments rendered by the Punjab & Haryana High Court and the Supreme Court judgments noted therein. In terms of the Punjab & Haryana High Court and the Supreme Court judgments noted therein, maintenance and overhauling of machinery is an integral part in the process of production. Therefore, the decision of the Larger Bench, rendered in the case of in CCE v. Modi Rubber Ltd. (supra), holds that lubricating oils and greases used for the purpose of lubricating the machines and machinery is to be taken as a process for the manufacture of final product, as it is essential for their working and integrally connected with the manufacture. This Larger Bench has referred to the Supreme Court judgment rendered in the case of Collector v. Ballarpur Industries Ltd. - 1989 (43) E.L.T. 804 (S.C.), Collector v. Eastend Paper Industries Ltd. (supra) and also that of the Patna High Court judgment rendered in the case of Collector T....