ORDER
J.H. Joglekar, Member (T)
1. These two stay applications have been filed by two different assessees and are disposed of in the common order since the issue involved is the same.
2. The assessees in each case were denied Modvat credit on HSD oil used captively for generation of electricity which in turn was used for production of final products, on the ground that it stood specifically excluded under notification issued under Rule 57A. The Commissioner in the impugned order, in holding so, relied upon the Tribunal judgment in the case of Ferro Alloys Corporation Ltd. v. C.C.E., 1997 (20) RLT 778 (CEGAT-S 2B). He also referred to an Explanation added to Rule 57B by virtue of Notification No. 5/98-C.E. (N.T.), dated 2-3-1998 which equated the term “inputs” used in the said Rule with the meaning given to this term in Rule 57A. He, further, held that since the amendment was clarificatory, it would have retrospective effect and the oil so used, would be barred from availing of credit.
3. Shri Bhattacharya relies upon the Tribunal judgment in the case of India Cements Ltd. v. C.C.E., Hyderabad reported in 1997 (95) E.L.T. 520 (Tri.).
4. Shri Arunachalam, Id. DR relies upon the Supreme Court judgment in the case of Sulochana Ammo. v. Naryanan Nair reported in 1995 (77) E.L.T. 785 (S.C.). In this judgment, it has been held that an Explanation is meant to explain the meaning of the words contained in the parent provision or in the alternative qualify certain ambiguities or clear them up. It then becomes part and parcel of the original enactment.
5. I have carefully considered the submissions made before me. The citation made by Id. DR was also cited before CEGAT in Ferro Alloys case (supra). In this judgment, the Tribunal has rejected the claim of the assessees on the observation that generation of electricity could not be taken to be part of the set up for processes for the manufacture ferro alloys.
6. In the judgment relied upon by the Id. Counsel the Tribunal held that oil used for generation of electricity, which in turn, was used to manufacture cement, qualified for the benefit of Modvat. The judgment of the Supreme Court relied upon by the Id. DR and taken cognizance of in the Ferro Alloys judgment, relates to the provisions of the CPC and its interpretation by virtue of an Explanation being added thereto. The observation made by the Court in paragraph 8 of the order reads as under :
“It is settled law that explanation to a section is not a substantive provision by itself. It is entitled to explain the meaning of the words contained in the section or clarify certain ambiguities or clear them up. It becomes a part and parcel of the enactment. Its meaning must depend upon its terms. Sometime it would be added to include something within it or to exclude from the ambit of the main provision or condition or some words occurring in it. Therefore, the explanation normally should be so read as to hamonise with and to clear up any ambiguity in the same section.”
7. The Court in this order, have not held that an Explanation would always have retrospective effect. If an Explanation seeks to exclude something from the ambit of the main provision, then its retrospective application would have the effect of depriving an assessee of the benefit of that provision when such prohibition did not form part of that provision. In this case, the Explanation was added subsequent to the availment of the credit by the assessees. The two contradictory citations on the eligibility of the oil do not cover this particular issue at all.
8. In my opinion, the effect of the Explanation added to Rule STB will have to be examined not by a single Member, but by a double Member Bench. I direct the registry to list this case for final hearing before an appropriate Bench. As far as these two stay applications are concerned, I deem it appropriate to grant unconditional stay and waiver of the duty confirmed in each case as follows:
1. M/s. Shruti Synthetics – Rs. 6,10,923/-; &
2. M/s. Shri Raj Texchem Ltd. – Rs. 4,61,819.97
Since the issue is likely to recur in other cases, the Registry is directed to list the main appeals for hearing before the appropriate Bench in December, 1998.