Central Administrative Tribunal - Allahabad
Pankaj Gupta vs Central Board Of Indirect Taxes And ... on 5 January, 2026
(Reserved on 17.12.2025)
Central Administrative Tribunal, Allahabad Bench Allahabad
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Original Application No.1201/2024
This the 05th Day of January, 2026
Hon'ble Mr. Justice Rajiv Joshi, Member (J)
Hon'ble Mr. Anjani Nandan Sharan, Member (A)
Pankaj Gupta aged about 55 years, son of late Shri Satya Prakash Gupta, retired
Inspector from Central Escise, Meerut, Resident of 116, West End Colony, Opp. DPS,
Meerut.
........... Applicant
By Advocates: Shri Jaswant Singh
Versus
1. Union of India, through the Secretary, Ministry of Finance, Government of
India, North Block, New Delhi.
2. Chairman, Central Board of Indirect Taxes and Customs, North Block, New
Delhi.
3. Principal Chief Commissioner, Central GST and Central Excise, Lucknow
Zone, 7-A, Ashok Marg, Lucknow (U.P.)
4. Chief Commissioner, Central GST & Customs, Meerut Zone, Opposite
Chaudhary Charan Singh University, Mangal Pandey Nagar, Meerut (U.P.).
5. Principal Chief Controller of Accounts, Central Board of Indirect Taxes and
Customs, 1st floor, DGACR Building, I P Estate, New Delhi.
6. Pay and Accounts Officer, Central GST & Customs, Meerut Zone, Opposite
Chaudhary Charan Singh University, Mangal Pandey Nagar, Meerut (U.P.)
........... Respondents
By Advocate: Shri Mahendra Prasad Mishra
ORDER
Delivered by Justice Rajiv Joshi, Member (Judicial) Heard Shri Jaswant Singh, learned counsel for the applicant and Shri Mahendra Prasad Mishra, learned counsel for the respondents.
2. The instant Original Application filed by the applicant for the following main relief(s):-
SUSHIL KUMAR SRIVASTAVA 2 "(i) This Hon'ble Tribunal may be pleased to direct the respondents to grant the benefits of 3rd MACP w.e.f.
06.12.2012.
(ii) This Hon'ble Tribunal may be pleased to direct the respondents to grant the benefits of Non-Functional Grade (NFG) Pay Scale of Rs. 9300-34800 in Pay Band-II, with Grade Pay of Rs. 5400/- w.e.f. 06.12.2016.
(iii) This Hon'ble Tribunal may graciously be pleased to issue a time- bound order to the respondents to refix the pension and pensionery benefits of applicant and also pay arrears thereof as a consequence of grant of 3rd MACP w.e.f. 06.12.2012 in GP of Rs. 4800/- and NFG w.e.f. 06.12.2016 in GP of Rs. 5400/-
3. The brief facts of the case as per the Original Application are as follows:-
3.1 The applicant was initially appointed as a Lower Division Clerk (LDC) on 21.04.1993 in the prescribed pay scale. In the normal course of service, he was promoted to the post of Upper Division Clerk (UDC) w.e.f. 01.07.2001 and thereafter, pursuant to a Review Departmental Promotion Committee held on 16.06.2011, he was granted notional promotion to the post of Inspector w.e.f. 06.12.2002 with corresponding fixation of pay. Thus, prior to completion of 20 years of regular service, the applicant had earned two promotions.
3.2 Consequent upon acceptance of the recommendations of the Sixth Central Pay Commission, the Modified Assured Career Progression (MACP) Scheme was introduced vide OM dated 19.05.2009. As per Para 28-B of the said Scheme, read with the clarification issued by the Central Board of Excise & Customs dated 23.05.2013, where an employee has earned two promotions before completion of 20 years of service, he becomes entitled to the third financial upgradation on completion of 10 years from the date of the second promotion or on completion of 30 years of service, whichever is earlier.
Applying the said provisions, the applicant became due for grant of the 3rd MACP in Grade Pay ₹4800/- w.e.f. 06.12.2012.
SUSHIL KUMAR SRIVASTAVA 3 3.3 In accordance with the aforesaid rules, the respondents themselves granted the applicant the 3rd MACP in Grade Pay ₹4800/- w.e.f. 06.12.2012 vide Establishment Order dated 08.10.2013, and his pay was duly fixed and drawn in the said grade pay. Subsequently, the revised pay structure was implemented in his case in August, 2016, and the applicant continued to draw salary in Grade Pay ₹4800/- without any objection from the respondents.
3.4 As per the Resolution of the Ministry of Finance (Department of Expenditure) dated 29.08.2008, Group 'B' officers are entitled to Non- Functional Grade (NFG) of ₹5400/- in Pay Band-2 after completion of four years of regular service in Grade Pay ₹4800/-. The applicant completed four years in Grade Pay ₹4800/- on 06.12.2016 and thereby became entitled to the grant of NFG w.e.f. the said date.
3.5 The applicant sought voluntary retirement, which was accepted, and he was retired from service w.e.f. 12.01.2017. However, at the stage of processing and release of pensionary benefits, the respondents raised objections regarding the admissibility of the 3rd MACP granted to the applicant and initiated correspondence for clarification, resulting in non- release of pension and retiral dues and causing serious financial hardship to the applicant after retirement.
3.6 Under protest and to secure release of his pensionary benefits, the applicant submitted representations, whereupon the respondents revised his pay by withdrawing the 3rd MACP and refixed his pension to his disadvantage. Despite further representations and the fact that similarly situated officers continued to draw pay on the basis of 3rd MACP, the respondents failed to restore the applicant's pay and benefits. 3.7 The issue relating to grant of the 3rd MACP in identical circumstances has already been settled by the Ahmedabad Bench of this Tribunal in its order dated 14.03.2024 in OA No. 237/2022, holding that grant of the 3rd MACP w.e.f. 06.12.2012 is in accordance with the MACP Scheme. Notwithstanding the said judicial pronouncement and repeated SUSHIL KUMAR SRIVASTAVA 4 representations of the applicant, the respondents have neither restored the 3rd MACP nor granted the consequential Non-Functional Grade and revision of pensionary benefits, compelling the applicant to approach this Tribunal.
4. Counter Affidavit has been filed from the side of the respondents on 13.08.2025 in which they have denied the claim of the applicant and stated that the applicant's promotion to the post of Inspector, though shown as effective from 06.12.2002, was purely notional and his actual promotion and joining on regular basis took place only on 16.06.2011. According to the respondents, for the purpose of grant of benefits under the MACP Scheme, only regular service in the grade is to be reckoned and not notional service. Hence, the applicant's regular service in the grade of Inspector commenced only from 16.06.2011.
4.1 Relying upon clarifications issued by the Department of Personnel & Training and communicated through CBEC letters dated 29.06.2021 and 14.07.2021, the respondents assert that notional promotion cannot be taken into account for calculating eligibility under MACP. On this basis, it is pleaded that the applicant was not eligible for grant of the 3rd MACP w.e.f. 06.12.2012 and that the earlier grant of 3rd MACP was erroneous and required rectification.
4.2 The respondents further contended that since the applicant did not complete the requisite period of regular service in Grade Pay ₹4800/-, he was also not entitled to Non-Functional Upgradation (NFU) in Pay Band-2 with Grade Pay ₹5400/-. Consequently, the request for grant of NFU and refixation of pay and pensionary benefits has been denied.
5. Learned counsel for the applicant has also filed a rejoinder to the aforesaid Counter Affidavit, wherein the averments made therein have been denied and the contents of the Original Application have been reiterated and reaffirmed.
SUSHIL KUMAR SRIVASTAVA 5
6. During the course of argument, learned counsel for the applicant submitted that the applicant had earned two promotions prior to completion of 20 years of service and therefore, became entitled to the 3rd MACP strictly in terms of Para 28-B of the MACP Scheme dated 19.05.2009 read with the clarification dated 23.05.2013. It is contended that the notional promotion granted to the applicant w.e.f. 06.12.2002 by way of a Review DPC carries with it all consequential benefits, including reckoning of service for MACP purposes, especially when the respondents themselves granted the 3rd MACP w.e.f. 06.12.2012 and allowed the applicant to draw pay in Grade Pay ₹4800/- for several years without objection. The subsequent withdrawal of the said benefit after retirement is arbitrary, contrary to the settled position of law and impermissible.
6.1 Learned counsel further submitted that upon completion of four years in Grade Pay ₹4800/- on 06.12.2016, the applicant became entitled to Non- Functional Grade (NFG) of ₹5400/- in PB-2 in terms of the Ministry of Finance Resolution dated 29.08.2008. Reliance is placed on the decision of the Ahmedabad Bench of this Tribunal dated 14.03.2024 in OA No. 237/2022, which has already settled the issue in favour of similarly situated employees.
6.2 Learned counsel for the applicant further submitted that the identical issue involved in the present Original Application has already been decided by this Tribunal in OA No.1085/2018 (Ashwani Kumar Dubey vs. Union of India & Ors.), OA No.691/2023 (Manoj Mishra vs. Union of India & Ors.) and OA No.143/2024 (Suman Lata Mishra vs. Union of India & Ors.). It was pointed out that the judgments passed in the aforesaid Original Applications were assailed by the respondents before the Hon'ble High Court by filing Writ-A Nos. 2491/2025, 2513/2025 and 15799/2025, respectively. The Hon'ble High Court, vide a common order dated 27.11.2025, dismissed all the said writ petitions, thereby affirming the view taken by this Tribunal. According SUSHIL KUMAR SRIVASTAVA 6 to learned counsel, the issue having thus attained finality, the applicant is entitled to the same relief on the principle of parity.
7. Per contra, learned counsel for the respondents contended that the applicant's promotion to the post of Inspector w.e.f. 06.12.2002 was only notional and that his actual promotion and assumption of charge on regular basis took place on 16.06.2011. It is submitted that under the MACP Scheme, only regular service in the grade is to be counted and not notional service. Placing reliance on clarifications issued by the Department of Personnel & Training and communicated through CBEC letters dated 29.06.2021 and 14.07.2021, learned counsel contended that the grant of 3rd MACP w.e.f. 06.12.2012 was erroneous and liable to be rectified. It is further submitted that since the applicant did not complete the requisite period of regular service in Grade Pay ₹4800/-, he was also not entitled to Non-Functional Upgradation to Grade Pay ₹5400/- and therefore, the actions taken by the respondents are strictly in accordance with the applicable rules and call for no interference by this Tribunal.
8. We have carefully considered the rival submissions advanced by the learned counsel for the parties and have minutely examined the pleadings, documents placed on record, the relevant provisions of the Modified Assured Career Progression Scheme (MACPS) dated 19.05.2009, the clarifications issued from time to time, as well as the judicial precedents relied upon.
9. At the outset, it is not in dispute that the applicant was initially appointed as LDC on 21.04.1993, promoted as UDC on 01.07.2001 and thereafter granted notional promotion to the post of Inspector w.e.f. 06.12.2002 pursuant to a Review DPC. It is also an admitted position that the said notional promotion was not adhoc, stop-gap or irregular, but was granted after due consideration by a duly constituted Review DPC, thereby conferring upon the applicant a regular promotional status, though with monetary benefits admissible from the date of actual assumption.
SUSHIL KUMAR SRIVASTAVA 7
10. The MACP Scheme was introduced vide Office Memorandum dated 19.05.2009. Para 28-B of the MACP Scheme, read with the clarification dated 23.05.2013, specifically provides that where an employee has already earned two promotions before completion of 20 years of service, he shall be entitled to the third financial upgradation on completion of 10 years from the date of second promotion or 30 years of service, whichever is earlier. Applying the aforesaid provision, the respondents themselves granted the applicant the 3rd MACP in Grade Pay ₹4800/- w.e.f. 06.12.2012 vide Establishment Order dated 08.10.2013 and allowed him to draw pay in the said grade pay uninterruptedly for several years.
11. The controversy raised by the respondents centres around the interpretation of the expression "regular service" for the purposes of MACP and their contention that notional promotion cannot be reckoned. However, this interpretation does not stand judicial scrutiny. Para 9 of the MACP Scheme clearly defines "regular service" as service rendered on a regular basis in a post and expressly excludes only adhoc, contractual or stop-gap service. There is no provision in the MACP Scheme which excludes service rendered pursuant to a notional promotion granted through a Review DPC.
12. This precise issue has already been authoritatively settled by the Ahmedabad Bench of this Tribunal in OA No. 237/2022 (decided on 14.03.2024), wherein it has been categorically held that notional promotion granted after Review DPC cannot be ignored for MACP purposes, and that exclusion of such period would amount to negating the very effect of the promotion itself. The Tribunal further held that once promotion is granted on a regular basis, merely postponing monetary benefits does not render the service non-regular.
SUSHIL KUMAR SRIVASTAVA 8
13. We find that the present case is squarely covered by a catena of decisions rendered by this Tribunal on the identical issue. The Tribunal has consistently held that withdrawal of MACP benefits on the ground that the promotion was notional is legally unsustainable. In this regard, reference may be made to OA No.1085/2018 (Ashwani Kumar Dubey vs. Union of India & Ors.), OA No.691/2023 (Manoj Mishra vs. Union of India & Ors.) and OA No.143/2024 (Suman Lata Mishra vs. Union of India & Ors.), wherein similar action of the respondents withdrawing the 3rd MACP was set aside. The orders passed by this Tribunal in the aforesaid Original Applications were assailed by the respondents before the Hon'ble High Court by filing Writ-A No.2491/2025, Writ-A No.2513/2025 and Writ-A No.15799/2025, respectively. The Hon'ble High Court, vide a common judgment dated 27.11.2025, dismissed all the said writ petitions and thereby affirmed the view taken by this Tribunal, giving finality to the legal position.
14. In the present case also, the respondents had themselves granted the 3rd MACP to the applicant w.e.f. 06.12.2012, allowed him to draw pay in the upgraded grade pay for a considerable period during his service tenure and raised no objection whatsoever at the relevant time. The subsequent withdrawal of the said benefit that too after the applicant's retirement and at the stage of processing pensionary benefits, is clearly arbitrary, unsustainable in law and violative of the settled principles of service jurisprudence. Such an action is also contrary to the doctrine of legitimate expectation, as a benefit validly granted and enjoyed for years cannot be withdrawn to the detriment of the employee at the post-retirement stage, particularly in the absence of any allegation of misrepresentation or fraud on the part of the applicant.
15. As regards the claim for Non-Functional Grade (NFG) of ₹5400/- in Pay Band-II, the entitlement flows from the Ministry of Finance (Department of Expenditure) Resolution dated 29.08.2008, which SUSHIL KUMAR SRIVASTAVA 9 provides that Group 'B' officers shall be granted NFG on completion of four years of regular service in Grade Pay ₹4800/-. In the present case, once the applicant's entitlement to Grade Pay ₹4800/- w.e.f. 06.12.2012 is upheld, it necessarily follows that he completed four years in the said grade pay on 06.12.2016, making him eligible for grant of NFG from that date.
16. The issue relating to the grant of Non-Functional Grade (NFG) of ₹5400/- in Pay Band-II on completion of four years of regular service in Grade Pay ₹4800/- is no longer res integra and stands settled beyond any pale of doubt by authoritative judicial pronouncements. The Madras High Court, in its judgment dated 06.09.2010 passed in W.P. No.13225 of 2010 (M. Subramaniam vs. Union of India & Ors.), has categorically held that the benefit of Non-Functional Grade is not dependent upon the mode of promotion or financial upgradation, but is to be granted solely on the basis of completion of the prescribed qualifying service in the Grade Pay of ₹4800/-. The said judgment has been affirmed by the Hon'ble Supreme Court, thereby conferring finality and binding force upon the principle laid down therein.
17. Following the aforesaid binding precedent, various Benches of this Tribunal have consistently extended the benefit of NFG ₹5400/- to similarly situated Group 'B' officers who completed four years of regular service in Grade Pay ₹4800/-, treating the judgment in M. Subramaniam as a judgment in rem applicable uniformly and not confined to the parties therein. The respondents have not been able to point out any contrary judgment or distinguishing feature so as to deny the same benefit to the applicant.
18. In the present case, once the applicant's entitlement to Grade Pay ₹4800/- w.e.f. 06.12.2012 stands restored and upheld, the factual position that emerges is that the applicant completed four years of SUSHIL KUMAR SRIVASTAVA 10 regular service in the said Grade Pay on 06.12.2016. Consequently, his eligibility for grant of Non-Functional Grade of ₹5400/- from the said date becomes automatic and flows as a matter of course from the settled legal position. The denial of the said benefit to the applicant is not based on any independent disqualification or ineligibility, but is merely a consequential fallout of the illegal and unsustainable withdrawal of the 3rd MACP. Once the foundation for such denial is removed, the consequential denial of NFG cannot survive on its own.
19. We also find considerable merit in the grievance raised by the applicant that the impugned action of the respondents has resulted in a downward revision of pay and pensionary benefits without issuance of any prior notice or affording an opportunity of hearing to the applicant. Such an action is in clear violation of the principles of natural justice, particularly when the financial benefits in question had been validly granted by the respondents themselves, implemented and allowed to be enjoyed by the applicant for a considerable length of time. After having acquiesced to the grant of the 3rd MACP and the consequential pay fixation and in the absence of any allegation of misrepresentation or fraud on the part of the applicant, the respondents were not justified in unilaterally withdrawing a vested financial benefit, that too after the applicant's retirement and at the stage of settlement of pensionary dues. The respondents have failed to place on record any cogent or legally sustainable justification for such unilateral action, which is rendered all the more arbitrary in view of the settled judicial position governing both the MACP as well as the grant of Non-Functional Grade of ₹5400/-. Such an exercise, carried out without adherence to due process of law, cannot be sustained.
20. In view of the above discussion, the Original Application is allowed with the following directions:
SUSHIL KUMAR SRIVASTAVA 11
(i) The action of the respondents in withdrawing the 3rd MACP granted to the applicant is hereby quashed and set aside.
(ii) The respondents are directed to restore the benefit of 3rd MACP to the applicant w.e.f. 06.12.2012 in Grade Pay ₹4800/-, as originally granted vide Establishment Order dated 08.10.2013.
(iii) The respondents are further directed to grant the applicant the Non-Functional Grade (NFG) in Pay Band-II with Grade Pay ₹5400/- w.e.f. 06.12.2016, on completion of four years of regular service in Grade Pay ₹4800/-.
(iv) Consequently, the respondents shall refix the pay and pensionary benefits of the applicant, including pension and all other retiral dues, and pay the arrears arising therefrom.
21. The aforesaid exercise shall be completed by the respondents within a period of four months from the date of receipt of a certified copy of this order.
22. No order as to costs.
All pending Miscellaneous Applications, if any, shall stand disposed of accordingly.
(Anjani Nandan Sharan) (Justice Rajiv Joshi)
Member (A) Member (J)
Sushil
SUSHIL
KUMAR
SRIVASTAVA