Per C.N.B. Nair : This appeal relates to claim for modvat credit. The issue has been referred to this Larger Bench on account of conflicting decisions rendered by Single Member Benches of this Tribunal in the cases of Eimco Elecon (India) Ltd. Vs. CCE, Ahmedabad reported in 1994 (74) ELT 918 (Tribunal) and Orissa Extrusions Ltd. Vs. CCE, Bhubaneswar reported in 1998 (26) RLT 151=1998 (104) ELT 42 (Tribunal).

2. During hearing, learned counsel for the appellants explained that they are manufacturers of generating sets, IC Engines, pump sets and parts of these equipments. They received various components of these equipments as inputs (for the purpose of assembling the aforesaid equipment) and took credit of duty paid. In cases where components so received were found to be defective, they had returned them to the original suppliers after payment of excise duty. Some of the suppliers did not accept the goods back at all. Thereupon, those goods came back to the appellants and they took the amount of duty paid by them as modvat credit. These duty credits had been rejected by the jurisdictional Central Excise authorities and the Commissioner of Central Excise rejected the appellants'