Gujarat High Court
Ajanta Manufacturing Private Limited vs Union Of India on 20 March, 2025
Author: Bhargav D. Karia
Bench: Bhargav D. Karia
NEUTRAL CITATION
C/SCA/11788/2023 JUDGMENT DATED: 20/03/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 11788 of 2023
With
R/SPECIAL CIVIL APPLICATION NO. 11793 of 2023
With
R/SPECIAL CIVIL APPLICATION NO. 11794 of 2023
With
R/SPECIAL CIVIL APPLICATION NO. 11797 of 2023
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE BHARGAV D. KARIA
and
HONOURABLE MR.JUSTICE D.N.RAY
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Approved for Reporting Yes No
✓
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AJANTA MANUFACTURING PRIVATE LIMITED & ANR.
Versus
UNION OF INDIA & ORS.
==========================================================
Appearance:
MS AMRITA M THAKORE(3208) for the Petitioner(s) No. 1,2
AYAAN A PATEL(8900) for the Respondent(s) No. 3,4
MR CB GUPTA(1685) for the Respondent(s) No. 1,2
==========================================================
CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA
and
HONOURABLE MR.JUSTICE D.N.RAY
Date : 20/03/2025
ORAL JUDGMENT
(PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA) Page 1 of 60 Uploaded by RAGHUNATH R NAIR(HC00196) on Thu Apr 17 2025 Downloaded on : Fri Apr 18 21:24:52 IST 2025 NEUTRAL CITATION C/SCA/11788/2023 JUDGMENT DATED: 20/03/2025 undefined
1. Heard learned advocate Ms. Amrita M. Thakore for the petitioners and learned advocate Mr. C.B. Gupta for the respondents.
2. Rule returnable forthwith. Learned advocate Mr. C.B. Gupta waives service of notice of rule on behalf of the respondents.
3. By these petitions, the petitioners have challenged the Orders-in-Appeal dated 18/19.05.2023 passed by respondent no.2 Commissioner (Appeals) GST and Central Excise, Rajkot allowing the appeals filed by the department against the order granting refund to the petitioners.
4. For the sake of convenience, Special Page 2 of 60 Uploaded by RAGHUNATH R NAIR(HC00196) on Thu Apr 17 2025 Downloaded on : Fri Apr 18 21:24:52 IST 2025 NEUTRAL CITATION C/SCA/11788/2023 JUDGMENT DATED: 20/03/2025 undefined Civil Application No.11793 of 2023 is treated as a lead matter.
5. Brief facts of the case are that the petitioner no. 1 is a company incorporated and registered under the relevant provisions of the Companies Act, 1956 and manufactures various excisable products such as Electric Energy Saving Lamp, Vitrified Tiles, Quartz Clock, etc. at the unit in Kutch.
6. Pursuant to the massive earthquake in the District of Kutch in the year 2001, the Central Government had issued Notification No. 39/2001-CE dated 31.7.2001 granting exemption to excisable goods (other than those specified in the Annexure to this notification) cleared Page 3 of 60 Uploaded by RAGHUNATH R NAIR(HC00196) on Thu Apr 17 2025 Downloaded on : Fri Apr 18 21:24:52 IST 2025 NEUTRAL CITATION C/SCA/11788/2023 JUDGMENT DATED: 20/03/2025 undefined from units in Kutch. The said Notification was amended from time to time thereafter. Since the petitioner's unit is in the District of Kutch, it has been availing the benefits of Notification No. 39/2001- CE dated 31.7.2001 and of amended notification and the petitioner had been filing refund claims from time to time.
7. For the period from June 2008 to November 2008, the petitioner had filed refund claims totaling of Rs. 3,67,09,703/- towards basic excise duty paid from PLA on finished goods cleared during this period.
8. In respect of the refund claim for June 2008 petitioner filed refund claim of Rs. 1,84,01,221/- and the adjudicating Page 4 of 60 Uploaded by RAGHUNATH R NAIR(HC00196) on Thu Apr 17 2025 Downloaded on : Fri Apr 18 21:24:52 IST 2025 NEUTRAL CITATION C/SCA/11788/2023 JUDGMENT DATED: 20/03/2025 undefined authority had passed a Refund Order dated 7.11.2008 holding that the petitioner was eligible for refund only of Rs. 63,37,276/- by calculating refund on value addition as per rate fixed based on category as per para 2B(a) of the Notification No. 39/2001-CE 31.7.2001 as amended by Notification No. 33/2008-CE dated 27.3.2008. The refund amount was however further restricted to Rs. 46,45,854/- by deducting an amount of Rs. 16,91,422/- on the ground that there was unutilised Cenvat Credit on the last date of the month under consideration in the petitioner's Cenvat Credit accounts in respect of eligible goods i.e. Vitrified Tiles, CFL and Quartz Clock for which exemption was available.
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9. The petitioner challenged the said Refund Order dated 7.11.2008 before the Commissioner (Appeals), Rajkot i.e. respondent no. 2. The then Commissioner (Appeals), Rajkot, vide Order in Appeal No. 305/(302- RAJ/ RAJ/ 2009/COMMR(A)/RAJ dated 25.3.2009, allowed the petitioner's said appeal and directed the lower authority to adjust the Cenvat Credit balance of Rs. 16,91,422/- towards payment of duty on vitrified tiles for the month of June 2008 and consequently allow an equal amount of duty paid in PLA on vitrified tiles as re-credit in the PLA account and further directed the lower authority to redetermine the amount of refund at the prescribed rate of 36% for duty paid on all the goods covered under the category at Sr. No. 16 of the Page 6 of 60 Uploaded by RAGHUNATH R NAIR(HC00196) on Thu Apr 17 2025 Downloaded on : Fri Apr 18 21:24:52 IST 2025 NEUTRAL CITATION C/SCA/11788/2023 JUDGMENT DATED: 20/03/2025 undefined Notification No. 33/2008 dated 27.3.2008 by taking total duty paid from PLA and Cenvat on all the goods covered under Sr. No. 16 and to grant the differential amount other than the amount already sanctioned by the lower authority.
10. The Department challenged the said Order in Appeal No. 305/ (302-RAJ/ RAJ/ 2009/COMMR(A)/RAJ dated 25.3.2009 passed by the Commissioner (Appeals), Rajkot by way of Appeal No. 1077 of 2009, along with stay application, before the Customs Excise and Service Tax Appellate Tribunal, Ahmedabad Bench (CESTAT). The CESTAT rejected the Department's stay application vide Order No. S/ 1349/WZB/AHH/09 dated 25.8.2009. The Commissioner, Central Excise, Rajkot accepted the order of Page 7 of 60 Uploaded by RAGHUNATH R NAIR(HC00196) on Thu Apr 17 2025 Downloaded on : Fri Apr 18 21:24:52 IST 2025 NEUTRAL CITATION C/SCA/11788/2023 JUDGMENT DATED: 20/03/2025 undefined CESTAT dated 1.10.2009.
11. Considering the rejection of the Department's Stay Application by CESTAT, the respondent no. 4 herein inter alia passed consequential Refund Orders, and the following amounts were refunded to the petitioner:
"i. Refund Order No, 167/2009/10 dated 30.11.2009 for an amount of Rs. 38,77,819/- for the period of June 2008.
ii. Refund Order No. 168/2009/10 dated 30.11.2009 for an amount of Rs. 35,20,255/- for the period of July 2008.
iii. Refund Order No. 169/2009/10 dated 30.11.2009 for an amount of Rs. 72,17,806/- for the period of August 2008.
iv. Refund Order No. 170/2009/10 dated 30.11.2009 for an amount of Rs. 75,35,235/- for the period of September 2008.Page 8 of 60 Uploaded by RAGHUNATH R NAIR(HC00196) on Thu Apr 17 2025 Downloaded on : Fri Apr 18 21:24:52 IST 2025
NEUTRAL CITATION C/SCA/11788/2023 JUDGMENT DATED: 20/03/2025 undefined v. Refund Order No. 171/2009/10 dated 30.11.2009 for an amount of Rs. 78,11,031/- for the period of October 2008.
vi. Refund Order No. 172/2009/10 dated 30.11.2009 for an amount of Rs. 67,31,011/- for the period of November 2008.
vii. Refund Order No. 180/2009/10 dated 22.12.2009 for an amount of Rs. 1,94,94,450/- (Annual Difference 2008-09). "
12. In March 2010, the Department filed an appeal, bearing Appeal No. V2/3/EA2/RAJ/2010, before the respondent no. 2 against the aforesaid consequential Refund Order Nos.167 to 172/2009/10 dated 30.11.2009. The said appeal was pending for several years because the Department had filed the aforementioned appeal in CESTAT, Ahmedabad which was pending. Page 9 of 60 Uploaded by RAGHUNATH R NAIR(HC00196) on Thu Apr 17 2025 Downloaded on : Fri Apr 18 21:24:52 IST 2025
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13. On 1.8.2022, the CESTAT passed Order No. A/10917/2022 in the Department's Appeal No. 1077 of 2009 [filed against OIA NO. 305/302- RAJ) / RAJ/ 2009/COMMR(A) /RAJ dated 25.3.2009 passed by Commissioner (Appeals), Rajkot] recording that Department had withdrawn the appeal on the ground of monetary limit.
14. Thus, the Order in Appeal No.305/ (302- RAJ/RAJ/ RAJ/2009/COMMR(A)/RAJ dated 25.3.2009 passed by the Commissioner (Appeals), Rajkot in favour of the petitioner became final and binding on the respondent authorities including the respondent no. 2.
15. Thereafter, the respondent no. 2 issued a personal hearing notice on 7.12.2022, fixing the personal hearing of Page 10 of 60 Uploaded by RAGHUNATH R NAIR(HC00196) on Thu Apr 17 2025 Downloaded on : Fri Apr 18 21:24:52 IST 2025 NEUTRAL CITATION C/SCA/11788/2023 JUDGMENT DATED: 20/03/2025 undefined the Department's aforesaid Appeal No. V2/3/EA2/RAJ/2010 on 21.12.2022. Other appeals filed by the Department against consequential refund orders of the adjudicating authority for annual difference of F.Y. 2008-09 and for other periods were also posted for hearing on the same day vide the same hearing notice. However, the said notice was received by the petitioner on 3.1.2023 i.e. after the date fixed for hearing. Hence the petitioner addressed a letter dated 5.1.2023 pointing this out and requesting for another hearing date by giving one month notice.
16. The respondent no. 2 issued another personal hearing notice dated 29.12.2022. This was received by the petitioner on Page 11 of 60 Uploaded by RAGHUNATH R NAIR(HC00196) on Thu Apr 17 2025 Downloaded on : Fri Apr 18 21:24:52 IST 2025 NEUTRAL CITATION C/SCA/11788/2023 JUDGMENT DATED: 20/03/2025 undefined 8.1.2023, and the petitioner addressed a letter dated 31.1.2023 requesting to fix the personal hearing in the last week of February since its representative was not able to attend due to ill health. Thereafter, on 15.2.2023, the respondent no. 2 issued personal hearing notice fixing the personal hearing on 9/10.3.2023.
17. It is the case of the petitioner that unfortunately, during this period, the top management of the petitioner was entangled in the accident pertaining to the Morbi Hanging Bridge and was unable to attend to the matter or appoint an advocate/ consultant to appear before the respondent no. 2 on 9/10.3.2023. Hence, the petitioner, through its Import Executive, addressed a letter dated 3.3.2023 Page 12 of 60 Uploaded by RAGHUNATH R NAIR(HC00196) on Thu Apr 17 2025 Downloaded on : Fri Apr 18 21:24:52 IST 2025 NEUTRAL CITATION C/SCA/11788/2023 JUDGMENT DATED: 20/03/2025 undefined submitting that since the Department's Appeal No. 1077 of 2009 before CESTAT was withdrawn, the order dated 25.3.2009 passed by the Commissioner (Appeals) has become final and hence the Department's Appeal No. V2/3/EA2/RAJ/2010 against the aforesaid consequential Refund Order Nos. 167 to 172/2009/10 dated 30.11.2009 were required to be dismissed. The petitioner also submitted that if any further submissions, clarification or documents are required, the appeal may be posted on any other date to enable the petitioner to make effective hearing in the matter 18. However, the respondent no. 2 proceeded to allow the Department's Appeal No. V2/3/EA2/RAJ/2010 vide the impugned Order in Appeal No. KCH-EXCUS-000-APP-037- Page 13 of 60 Uploaded by RAGHUNATH R NAIR(HC00196) on Thu Apr 17 2025 Downloaded on : Fri Apr 18 21:24:52 IST 2025 NEUTRAL CITATION C/SCA/11788/2023 JUDGMENT DATED: 20/03/2025 undefined 2023 dated 18/19.5.2023 (received by the petitioner on 5.6.2023).
19. Being aggrieved, the petitioner has preferred the present petition.
20. The issue raised in all these petitions is same. For ready reference, a chart is made to highlight individual facts of each case:
Sr. SCA No. Period covered Details of consequential refund No. order following order of Commissioner(Appeals) dated 25.03.2009 1 11797/2023 Annual claim for i) Refund order dated 22.12.2019 differential duty paid for Rs.1,94,94,450/- in respect of in respect to 2008- differential refund for 2008-2009 2009 2 11794/2023 September- i) Refund order dated 11.02.2010 November 2009 for Rs.32,76,742/- in respect to September 2009
ii) Refund order dated 11.02.2010 for Rs.91,54,688/- in respect to October, 2009
iii) Refund Order dated 11.02.2010 for Rs.72,20,615/- in respect to November, 2009.
3 11788/2023 December 2009- i) Refund order dated 12.05.2010 March 2010 for Rs.38,40,705/- in respect to February 2010 Page 14 of 60 Uploaded by RAGHUNATH R NAIR(HC00196) on Thu Apr 17 2025 Downloaded on : Fri Apr 18 21:24:52 IST 2025 NEUTRAL CITATION C/SCA/11788/2023 JUDGMENT DATED: 20/03/2025 undefined
ii) Refund order dated 12.05.2010 for Rs.50,17,578/- in respect to January 2010
iii) Refund order dated 12.05.2010 for Rs.87,29,720/- in respect to December, 2009
iv) Refund order dated 31.05.2010 for Rs.65,32,489/- in respect to March 2010.
SUBMISSIONS OF THE PETITIONERS:
21. Learned advocate Ms. Amrita M. Thakore for the petitioners submitted that respondent no.2 could not have allowed the appeal filed by the department against order granting sanction taking a contrary view as per Order-in-Appeal No. 305/(302-
RAJ) /RAJ/ 2009/ COMMR (A)/RAJ dated 25.03.2009 passed by the coordinate authority i.e. Commissioner (Appeals). It was submitted that by order dated 25.03.2009, the Commissioner (Appeals) allowed the appeal filed by the Page 15 of 60 Uploaded by RAGHUNATH R NAIR(HC00196) on Thu Apr 17 2025 Downloaded on : Fri Apr 18 21:24:52 IST 2025 NEUTRAL CITATION C/SCA/11788/2023 JUDGMENT DATED: 20/03/2025 undefined petitioners against the order-in-original with the following directions :
"11- In view of the foregoing discussions I set aside the order of the Lower Authority and direct the Lower Authority to re determine the refund amount as under:-
(i) The Lower Authority shall adjust the CENVAT balance of Rs.
16,91,422/- towards payment of duty on Vitrified Tiles for the month of June 2008 and consequently allow the equal amount of duty paid in PLA on Vitrified Tiles as re- credit in their PLA amount as the appellants are eligible to pay duty on Vitrified Tiles from the overall CENVAT credit available from other final products.
ii) The Lower Authority is directed to re-determine the amount of refund at the prescribed rate of 36% for duty paid on all the goods covered under the category at Sl.16 of the Notification No. 33/2008 dated 27.3.2008 by taking total duty paid from PLA and CENVAT on all the goods covered under Sl. No.16 and grant the differential amount other than the amount already Page 16 of 60 Uploaded by RAGHUNATH R NAIR(HC00196) on Thu Apr 17 2025 Downloaded on : Fri Apr 18 21:24:52 IST 2025 NEUTRAL CITATION C/SCA/11788/2023 JUDGMENT DATED: 20/03/2025 undefined sanctioned by the Lower Authority."
22. It was submitted that there were two issues decided by the Commissioner(Appeals) by order dated 25.03.2009 namely, (i) regarding giving benefit of amount which is utilised from PLA account instead of debiting it into Cenvat Credit Account (ii) issue on percentage of value addition as per the rate specified in Notification No.33/2008 dated 10.06.2008 as all the final product manufactured and cleared by the petitioners under area based exemption notification falls under Entry at SL. No.16 of the Table of the said Notification as all other goods other than goods covered in SL. No. 1 to 15 of the notification and the percentage of refund Page 17 of 60 Uploaded by RAGHUNATH R NAIR(HC00196) on Thu Apr 17 2025 Downloaded on : Fri Apr 18 21:24:52 IST 2025 NEUTRAL CITATION C/SCA/11788/2023 JUDGMENT DATED: 20/03/2025 undefined specified in SL No.16 is 36% of the total duty paid on the said goods. It was therefore, submitted that since all the goods are covered under single category under SL No.16 and 36% is prescribed rate, the petitioners have claimed refund on the total duty paid in PLA account and total duty paid utilizing Cenvat Credit together for arriving at percentage and the adjudicating authority was not justified in computing duty separately for each product and thereafter arrive at percentage of refund. It was submitted that the Commissioner (Appeals) under the order dated 25.03.2009 accepted that the method adopted by the petitioner was correct for arriving at the total duty paid on the goods under Serial No.16 together and arriving at total duty Page 18 of 60 Uploaded by RAGHUNATH R NAIR(HC00196) on Thu Apr 17 2025 Downloaded on : Fri Apr 18 21:24:52 IST 2025 NEUTRAL CITATION C/SCA/11788/2023 JUDGMENT DATED: 20/03/2025 undefined payment taking duty payment from PLA account and Cenvat account of the items together for applying 36% as refund amount.
23. It was submitted that on the basis of said order, refund orders were passed by the respondent which were challenged by the department and respondent no.2 did not agree with the view of the order passed by his predecessor and took a different view by not allowing refund at the rate of 36% on today duty paid on all products from PLA and Cenvat credit by the petitioner and reversed the refund order passed by the adjudicating authority relying upon the order of Commissioner (Appeals) dated 25.03.2009.
24. It was submitted that respondent no.2 Page 19 of 60 Uploaded by RAGHUNATH R NAIR(HC00196) on Thu Apr 17 2025 Downloaded on : Fri Apr 18 21:24:52 IST 2025 NEUTRAL CITATION C/SCA/11788/2023 JUDGMENT DATED: 20/03/2025 undefined could not have taken a different view than what is taken by the Commissioner(Appeals) vide order dated 25.03.2009 and observation made by respondent no.2 in the impugned order that he was at liberty to differ with his predecessor is contrary to the judicial propriety and therefore, impugned order is liable to be quashed and set aside being contrary to the order dated 25.03.2009 which has achieved finality as appeal filed by the department is disposed of on the ground of low tax effect.
SUBMISSIONS OF THE RESPONDENTS:
25. Per contra, learned advocate Mr. C.B. Gupta submitted that merely because appeal before the CESTAT was disposed of on low tax effect, order passed by Commissioner(Appeals) on 25.03.2009 cannot Page 20 of 60 Uploaded by RAGHUNATH R NAIR(HC00196) on Thu Apr 17 2025 Downloaded on : Fri Apr 18 21:24:52 IST 2025 NEUTRAL CITATION C/SCA/11788/2023 JUDGMENT DATED: 20/03/2025 undefined be said to have achieved finality and respondent no.2 was justified in taking a different view as there is no order passed by higher authority which is binding upon respondent no.2.
26. It was submitted that the petitioner has an alternative remedy to prefer an appeal before the Tribunal in terms of section 35B of the Central Excise Act, 1944 and therefore, this petition should not be entertained in view of decision of Hon'ble Apex Court in case of Whirpool Corporation v. Registrar of Trade Marks, Mumbai reported in (1998) 8 SCC 1, wherein it is held availability of alternative remedy is not to operate as a bar but High Court has imposed upon itself certain restrictions and except three ingredients Page 21 of 60 Uploaded by RAGHUNATH R NAIR(HC00196) on Thu Apr 17 2025 Downloaded on : Fri Apr 18 21:24:52 IST 2025 NEUTRAL CITATION C/SCA/11788/2023 JUDGMENT DATED: 20/03/2025 undefined namely, (i) where the writ petition has been filed for enforcement of fundamental rights or (ii) where there has been a violation of principles of natural justice or (iii) where the order or proceedings are wholly without jurisdiction or (iv) the vires of the Act is challenged, then only writ petition is required to be entertained otherwise the petitioner is required to be relegated to avail alternative remedy.
27. It was therefore, submitted that none of the criteria prescribed by the Hon'ble Apex Court for entertaining the writ are present in the facts of the present case and the petitioner therefore, may be relegated to alternative efficacious remedy as per the provisions of section Page 22 of 60 Uploaded by RAGHUNATH R NAIR(HC00196) on Thu Apr 17 2025 Downloaded on : Fri Apr 18 21:24:52 IST 2025 NEUTRAL CITATION C/SCA/11788/2023 JUDGMENT DATED: 20/03/2025 undefined 35B of the Act.
28. It was further submitted that respondent no.2 has taken into consideration the conditions prescribed in the Notification No.39/2001-CE as amended by Notification No.33/2008-CE dated 10.06.2008 and thereafter, held that correct value addition can be determined if the duty payment is computed separately for each product. It was therefore, submitted that if the refund is computed on the basis of the duty paid on all the products, then the value addition on individual product is not considered whereas refund is regulated on the basis of the value addition, and hence the respondent no.2 has rightly held that the value of each respective product is required to be considered and the product Page 23 of 60 Uploaded by RAGHUNATH R NAIR(HC00196) on Thu Apr 17 2025 Downloaded on : Fri Apr 18 21:24:52 IST 2025 NEUTRAL CITATION C/SCA/11788/2023 JUDGMENT DATED: 20/03/2025 undefined cannot be considered collectively together only because they are falling under Sl. No. 16 of the Notification. It was therefore, submitted that no interference is called for by exercising extraordinary jurisdiction under Articles 226 and 227 of the Constitution of India by the Court. DISCUSSION AND FINDINGS:
29. Having heard learned advocates for the respective parties and considering the facts of the case, it would be necessary to refer to relevant clauses of Notification No.39/2001-CE dated 31.07.2001 which is amended by Notification No.33/2008-CE dated 10.06.2008 as under:
"2. The duty payable on value addition shall be equivalent to the amount calculated as a percentage of the total duty payable on the said excisable Page 24 of 60 Uploaded by RAGHUNATH R NAIR(HC00196) on Thu Apr 17 2025 Downloaded on : Fri Apr 18 21:24:52 IST 2025 NEUTRAL CITATION C/SCA/11788/2023 JUDGMENT DATED: 20/03/2025 undefined goods of the description specified in column (3) of the Table below (hereinafter referred to as the said Table) and falling within the Chapter of the said First Schedule as are given in the corresponding entry in column (2) of the said Table 3[when manufactured starting from inputs specified in the corresponding entry in column(5) of the said Table in the same factory] all the rates specified in corresponding entry in column (4) of the said Table S. No. Chapter of the First Description of Rate Description of Schedule goods inputs for manufacture of goods in column (3) (1) (2) (3) (4) (5)
1. 29 All goods 29 All goods
2. 30 All goods 56 All goods
3. 33 All goods 56 All goods
4. 34 All goods 38 All goods
5. 38 All goods 34 All goods
6. 39 All goods 26 All goods
7. 40 Tyres, tubes, 41 All goods flaps
8. 72 or 73 All goods 39 Any goods other than iron ore
9. 74 All goods 15 All goods
10. 76 All goods 36 All goods
11. 85 Electric 31 All goods motors and generators, electric Page 25 of 60 Uploaded by RAGHUNATH R NAIR(HC00196) on Thu Apr 17 2025 Downloaded on : Fri Apr 18 21:24:52 IST 2025 NEUTRAL CITATION C/SCA/11788/2023 JUDGMENT DATED: 20/03/2025 undefined generating sets and parts thereof
12. 25 Cement or 75 Limestorne cement clinker and gypsyum
13. 17 or 35 Modified 75 maize starch/glucose
14. 28 Cocoa butter 75 Cocoa beans or powder
15. 72 or 73 Iron and steel 75 Iron ore products
16. Any chapter Goods other 36 Any goods than those mentioned above in S. Nos. 1 to 15 Provided that where the duty payable on value addition exceeds the duty paid by the manufacturer on the said excisable goods, other than the amount paid by utilization of CENVAT credit during the month, the duty payable on value addition, shall be deemed to be equal to the duty so paid other than by CENVAT credit.
2B The exemption contained in this notification shall be given effect to in the following manner, namely: -
(a) the manufacturer shall submit a statement of the total duty paid and that paid by utilization of CENVAT credit, on each category of goods specified in the said Table Page 26 of 60 Uploaded by RAGHUNATH R NAIR(HC00196) on Thu Apr 17 2025 Downloaded on : Fri Apr 18 21:24:52 IST 2025 NEUTRAL CITATION C/SCA/11788/2023 JUDGMENT DATED: 20/03/2025 undefined and cleared under this notification, to the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise, as the case may be, by the 7th of the next month in which the duty has been paid;
(b) the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise, as the case may be, after such verification as may be deemed necessary, shall refund the duty payable on value addition, computed in the manner as specified in paragraph 2 to the manufacturer by the 15th of the month following the one in which the statement as at clause (a) above has been submitted."
30. On perusal of the above clause of Notification No.39/2001, it is discernable that the petitioner is entitled to the refunds on account of duty payable on value addition equivalent to the amount calculated as a percentage of the total duty payable on the said excisable goods of the description Page 27 of 60 Uploaded by RAGHUNATH R NAIR(HC00196) on Thu Apr 17 2025 Downloaded on : Fri Apr 18 21:24:52 IST 2025 NEUTRAL CITATION C/SCA/11788/2023 JUDGMENT DATED: 20/03/2025 undefined specified in column(3) of the Table and falling within the Chapter of the First Schedule as given in the corresponding entry in column (2) of the said Table.
31. Proviso to clause (2) stipulates that where the duty payable on value addition exceeds the duty paid by the manufacturer on the said excisable goods, other than the amount paid by utilisation of Cenvat credit during the month, the duty payable on value addition shall be deemed to be equal to the duty so paid other than by Cenvat Credit meaning thereby the assessee is entitled to the refund/rebate at the rate of percentage prescribed in table on the total duty paid either through PLA or Cenvat Credit as per Serial Nos. and Chapter of first Schedule stated in the table.
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32. Clause 2B of the Circular No.39/2001 provides how exemption contained in the notification is to be given effect to. Sub-clause (a) of Clause 2B provides that the manufacturer has to submit a statement of total duty paid and that paid by utilisation of Cenvat Credit on each category of goods specified in the said table and cleared in the notification whereas sub-clause(b) provides that after verification by the authority, the refund shall be paid on the value addition computed in the manner as specified in para no. 2 of the notification.
33. Considering the above provisions, the Commissioner (Appeals) by order dated 25.03.2009 set aside the order passed by the lower authority and directed the lower Page 29 of 60 Uploaded by RAGHUNATH R NAIR(HC00196) on Thu Apr 17 2025 Downloaded on : Fri Apr 18 21:24:52 IST 2025 NEUTRAL CITATION C/SCA/11788/2023 JUDGMENT DATED: 20/03/2025 undefined authority to redetermine the refund and has held as under:
"10. Now propose to discuss the second issue on the percentage of value addition as per the rate specified under Notification No.33/2008 dated 10:06.2008 On perusal of records, it is seen that all the final products manufactured and cleared by the appellants under area based exemption notification falls under the entry at Sl. No. 16 of the Table of the said notification as all other goods other than goods covered at Sl. 1 to 15 of the notification and the percentage of refund specified under Sl. No. 16 is 36% of total duty paid on the said goods. Since all the goods are covered under single category under Sl.No.16 and 36% is the prescribed rate, there is a justification in the appellants contention that their total duty paid in PLA and total duty paid in CENVAT is to be taken together for arriving percentage. Whereas, the Lower Authority has computed the duty separately for each product and arrived at the percentage of refund. Therefore I find that the correct method for arriving at the total duty paid on the said goods Page 30 of 60 Uploaded by RAGHUNATH R NAIR(HC00196) on Thu Apr 17 2025 Downloaded on : Fri Apr 18 21:24:52 IST 2025 NEUTRAL CITATION C/SCA/11788/2023 JUDGMENT DATED: 20/03/2025 undefined is to take all the items falling under Sl.No. 16 together and arrive at the total duty payment taking the duty payment from PLA and CENVAT account of the items together. Thereafter, from the total duty paid together, the percentage should be calculated for. granting rebate. In the present case the total duty paid in PLA on the eligible goods is Rs. 1,75,52,776/- and total CENVAT utilized Rs. 1,10,66, 038/- and as per the Notification No. 33/2008 the 36% is the prescribed rate eligible for refund which comes to Rs.1,03,02,773/- which is less than the amount paid in PLA. Thus, the appellants are eligible for refund of R$.1,03,02,773) - Further as discussed in the preceding paragraph the appellants are eligible to utilize the CENVAT credit of Rs. 16,91,422/- towards duty payment on Vitrified Tiles and consequently eligible for re- credit of equivalent amount in their PLA account as the same has been discharged from PLA. The revised duty payment particulars would be as under:
PLA CENVAT TOTAL RATE. Eligible Amount Rs. 1,58,61,354/- Rs.1,27,57,460 Rs. 36% Rs.
/- 2,86,18,814/- 1,03,02,773/
-
Accordingly I hold that so long as all the eligible product falls Page 31 of 60 Uploaded by RAGHUNATH R NAIR(HC00196) on Thu Apr 17 2025 Downloaded on : Fri Apr 18 21:24:52 IST 2025 NEUTRAL CITATION C/SCA/11788/2023 JUDGMENT DATED: 20/03/2025 undefined under one category under entry No.16 of the Table annexed to the. Notification No.33/2008 and one single rate is specified for all the products under this category, the percentage of total duty paid should be based on total duty paid in PLA and CENVAT in respect of all the products covered under this category. Therefore the Lower Authority's order segregating the duty each product-wise under Sl.16 of the Table is not justified. The appellants are eligible for the refund on 36% of total duty paid which is Rs. 1,03,02,773/- which is less than the total duty paid from PLA on the eligible goods."
34. Based upon the above findings, the adjudicating authority has sanctioned the refund to the petitioner for subsequent period taking into consideration the total duty paid in PLA and total duty paid utilising Cenvat Credit together for arriving at percentage on all the products together. The department being aggrieved has challenged the same before the Commissioner (Appeals) though no appeal Page 32 of 60 Uploaded by RAGHUNATH R NAIR(HC00196) on Thu Apr 17 2025 Downloaded on : Fri Apr 18 21:24:52 IST 2025 NEUTRAL CITATION C/SCA/11788/2023 JUDGMENT DATED: 20/03/2025 undefined would lie in view of the issue already having being decided by Commissioner (Appeals) by order dated 25.03.2009 which has achieved finality. Therefore, the action of the department to challenge the refund order before the Commissioner (Appeals) was an exercise in futility.
35. However, the Commissioner(Appeals) taking a bold stand against judicial propriety and discipline, had an audacity to differ with the order dated 25.03.2009 passed by the Commissioner(Appeals) reversing the order granting the refund to the petitioner on the basis of the said order. Respondent no.2 Commissioner (Appeals) and observed as under :
"5. I have carefully gone through the facts of the case, impugned orders and submissions made by the Appellant in appeal memorandum and the submissions filed by the.Page 33 of 60 Uploaded by RAGHUNATH R NAIR(HC00196) on Thu Apr 17 2025 Downloaded on : Fri Apr 18 21:24:52 IST 2025
NEUTRAL CITATION C/SCA/11788/2023 JUDGMENT DATED: 20/03/2025 undefined Respondent. The issue to be decided in the present appeal is whether the impugned orders sanctioning refund at the prescribed rate of 36% for duty paid on all goods covered under Sl No 16 of Notif. 33/2008-CE by taking total duty paid from PLA and CENVAT on all goods covered under Sl No 16, is correct, proper and legal or not.
6. For ease of reference, I would like to refer to the provision contained in Notif. 39/2001-CE. The Notification provides that:
In cases where all the goods produced by a manufacturer are eligible for exemption under this notification, the exemption contained in this notification shall be available subject to the condition that the manufacturer first utilizes whole of CENVAT credit available to him on the last day of the month under consideration for payment of duty on goods cleared during such month and pays only the balance amount in cash.
2. The exemption contained in this notification shall be given effect in the following manner, namely
(a)
(b) Provided that in cases, where the Page 34 of 60 Uploaded by RAGHUNATH R NAIR(HC00196) on Thu Apr 17 2025 Downloaded on : Fri Apr 18 21:24:52 IST 2025 NEUTRAL CITATION C/SCA/11788/2023 JUDGMENT DATED: 20/03/2025 undefined exemption contained is not applicable to some of the goods produced by a manufacturer, such refund shall not exceed the amount of duty paid less the amount of CENVAT availed of, in respect of duty paid on the inputs used in or in relation to the manufacture of the goods cleared under this notification."
6.1 The said Notification was partially amended vide Notification 33/2008-CE wherein the provision for computing the amount of refund was regulated at a specified rate: However the condition regarding utilization of available Cenvat credit prior to payment from PLA was not altered. The Sl. No 16 of the said notification is a residual entry covering all the products other than those specified in Sl. No, 1 to 15, and a single rate for refund has been prescribed therein. However, the interpretation that since one single rate is specified for all the products under this category, the percentage of total duty paid should be based on total duty paid in PLA and CENVAT in respect of all the products covered under the category, is without the authority of law. Since the correct value addition can only be determined if the duty payment is computed Page 35 of 60 Uploaded by RAGHUNATH R NAIR(HC00196) on Thu Apr 17 2025 Downloaded on : Fri Apr 18 21:24:52 IST 2025 NEUTRAL CITATION C/SCA/11788/2023 JUDGMENT DATED: 20/03/2025 undefined separately for each product, it is only after this computation that the actual amount eligible for refund on products covered under the Notification No 39/2001-CE as amended vide Notification No 33/2008-CE dated 10.06.2008 can be determined: However, if refund is computed on the basis of the duty paid on all the products, then the value addition on individual products is not considered, which is not the intention of the Government. When refund is. regulated on the basis of value addition, the value addition for each respective products needs to be considered and not for various products collectively.
6.2 The departmental appeal filed against the appellate order challenging the direction to compute the refund based on the percentage of total duty paid on all products covered under the category, has been withdrawn on monetary grounds, in view of directions contained in Boards instruction from F.No:
390/Misc/163/2010-JC, dated 01.01.2016. The merits of the case have not been taken into consideration. However, although the departmental appeal has been dismissed as withdrawn, the merits of the case are not altered and the fact remains that the Page 36 of 60 Uploaded by RAGHUNATH R NAIR(HC00196) on Thu Apr 17 2025 Downloaded on : Fri Apr 18 21:24:52 IST 2025 NEUTRAL CITATION C/SCA/11788/2023 JUDGMENT DATED: 20/03/2025 undefined appellate order granting refund based on the percentage of total duty paid on all products covered under the category, is not in accordance with the provisions of law as stipulated in the Notification 39/2001-CE, and is not legal and proper. Further, the said appellate order by my predecessor, nor being an order from a higher authority, is not a binding precedent for successor appellate authority of equal rank for deciding subsequent appeals involving same issue on their merits in accordance with the statutory provisions. Hence, I find myself at liberty to differ with my learned predecessor.
Hence, I find that the refund orders sanctioning refund based on said appellate order, are not legal and proper and need to be set aside."
Above reasons given by respondent no.2 is required to be deprecated by all means in view of the fact that respondent no.2 could not have taken a different view than what was taken by his predecessor in order dated 25.03.2009. Respondent no.2 being Page 37 of 60 Uploaded by RAGHUNATH R NAIR(HC00196) on Thu Apr 17 2025 Downloaded on : Fri Apr 18 21:24:52 IST 2025 NEUTRAL CITATION C/SCA/11788/2023 JUDGMENT DATED: 20/03/2025 undefined Commissioner (Appeals) could not have differed with his coordinate rank Commissioner (Appeals) who was his predecessor by observing that the said appellate order of the predecessor not being an order from higher authority is not binding precedent for successor. Such an opinion of the Commissioner (Appeals) is contrary to the judicial discipline as any order passed by the same ranking officer is binding upon the successor when the said order of his predecessor has achieved finality.
36. At this stage, it would be pertinent to take note of following decisions:
1) In case of Union of India v.
Kamlakshi Finance Corporation Ltd reported Page 38 of 60 Uploaded by RAGHUNATH R NAIR(HC00196) on Thu Apr 17 2025 Downloaded on : Fri Apr 18 21:24:52 IST 2025 NEUTRAL CITATION C/SCA/11788/2023 JUDGMENT DATED: 20/03/2025 undefined in 1991 (55) ELT 433 (SCC), wherein Hon'ble Supreme Court has held as under:
"6. Sri Reddy is perhaps right in saying that the officers were not actuated by any mala fides in passing the impugned orders. They perhaps genuinely felt that the claim of the assessee was not tenable and that, if it was accepted, the Revenue would suffer. But what Sri Reddy overlooks is that we are not concerned here with the correctness or otherwise of their conclusion or of any factual malafides but with the fact that the officers, in reaching in their conclusion, by-passed two appellate orders in regard to the same issue which were placed before them, one of the Collector (Appeals) and the other of the Tribunal. The High Court has, in our view, rightly criticised this conduct of the Assistant Collectors and the harassment to the assessee caused by the failure of these officers to give effect to the orders of authorities higher to them in the appellate heirarchy. It cannot be too vehemently emphasised that it is of utmost importance that, in disposing of the quasi-judicial Page 39 of 60 Uploaded by RAGHUNATH R NAIR(HC00196) on Thu Apr 17 2025 Downloaded on : Fri Apr 18 21:24:52 IST 2025 NEUTRAL CITATION C/SCA/11788/2023 JUDGMENT DATED: 20/03/2025 undefined issues before them, revenue officers are bound by the decisions of the appellate authorities; The order of the Appellate Collector is binding on the Assistant Collectors working within his jurisdiction and the order of the Tribunal is binding upon the Assistant Collectors and the Appellate Collectors who function under the jurisdiction of the Tribunal. The principles of judicial discipline require that the orders of the higher appellate authorities should be followed unreservedly by the subordinate authorities. The mere fact that the order of the appellate authority is not "acceptable" to the department - in itself an objectionable phrase - and is the subject matter of an appeal can furnish no ground for not following it unless its operation has been suspended by a competent court. If this healthy rule is not followed, the result will only be undue harassment to assessees and chaos in administration of tax laws.
7. The impression or anxiety of the Assistant Collector that, if he accepted the assessee's contention, the department would lose revenue and would also have no remedy to have the matter rectified is also incorrect.Page 40 of 60 Uploaded by RAGHUNATH R NAIR(HC00196) on Thu Apr 17 2025 Downloaded on : Fri Apr 18 21:24:52 IST 2025
NEUTRAL CITATION C/SCA/11788/2023 JUDGMENT DATED: 20/03/2025 undefined Section 35-E confers adequate powers on the department in this regard. Under Sub-section (1), where the Central Board of Direct Taxes come across any order passed by the Collector of Central Excise with the legality or propriety of which it is not satisfied, it can direct the Collector to apply to the Appellate Tribunal for the determination of such points arising out of the decision or order as may be specified by the Board in its order. Under Sub- section(2) the Collector of Central Excise, when he comes across any order passed by an authority subordinate to him, if not satisfied with this legality or propriety, may direct such authority to apply to the Collector (Appeals) for the determination of such points arising out of the decision or order as may be specified by the Collector of Central Excise in his order and there is a further right of appeal to the department. The position now, therefore, is that, if any order passed by an Assistant Collector or Collector is adverse to the interests of the Revenue, the immediately higher administrative authority has the power to have the matter satisfactorily resolved by taking up the issue to the Appellate Collector or the Appellate Page 41 of 60 Uploaded by RAGHUNATH R NAIR(HC00196) on Thu Apr 17 2025 Downloaded on : Fri Apr 18 21:24:52 IST 2025 NEUTRAL CITATION C/SCA/11788/2023 JUDGMENT DATED: 20/03/2025 undefined Tribunal as the case may be. In the light of these amended provisions, there can be no justification for any Assistant Collector or Collector refusing to follow the order of the Appellate Collector or the Appellate Tribunal, as the case may be, even where he may have some reservations on its correctness. He has to follow the order of the higher appellate authority. This may instantly cause some prejudice to the Revenue but the remedy is also in the hands of the same officer. He has only to bring the matter to the notice of the Board or the Collector so as to enable appropriate proceedings being taken under Section.35-E (1) or (2) to keep the interests of the department alive. If the officer's view is the correct one, it will no doubt be finally upheld and the Revenue will get the duty, though after some delay which such procedure would entail.
8. We have dealt with this aspect at some length, because it has been suggested by the learned Additional Solicitor General that the observations made by the High Court, have been harsh on the officers. It is clear that the observations of the High Court, seemingly vehement, and apparently unpalatable to the Revenue, are Page 42 of 60 Uploaded by RAGHUNATH R NAIR(HC00196) on Thu Apr 17 2025 Downloaded on : Fri Apr 18 21:24:52 IST 2025 NEUTRAL CITATION C/SCA/11788/2023 JUDGMENT DATED: 20/03/2025 undefined only intended to curb a tendency in revenue matters which, if allowed to become widespread, could result in considerable harassment to the assesses-public without any benefit to the Revenue. We would like to say that the department should take these observations in the proper spirit.
The observations of the High Court should be kept in mind in future and the utmost regard should be paid by the adjudicating authorities and the appellate authorities to the requirements of judicial discipline and the need for giving effect to the orders of the higher appellate authorities which are binding on them."
2) In case of Commissioner of Central Excise, Mumbai v. Mahindra & Mahindra Ltd reported in (2015) 58 taxmann.com 278, wherein Hon'ble Supreme Court held as under:
"4. Since two Benches of the same strength of Members have taken two conflicting views, we are of the opinion, that judicial discipline requires that instead of disagreeing with the view taken by the First Bench, the appropriate Page 43 of 60 Uploaded by RAGHUNATH R NAIR(HC00196) on Thu Apr 17 2025 Downloaded on : Fri Apr 18 21:24:52 IST 2025 NEUTRAL CITATION C/SCA/11788/2023 JUDGMENT DATED: 20/03/2025 undefined course for the second Bench would have been to refer the matter to a Larger Bench. This is the basic requirement of judicial discipline. Since this has not been done, we set aside both orders and remand both the appeals back to the Tribunal and request its President to constitute a larger Bench of three Members to decide the issue whether the vehicles manufactured by the assessee falls under Entry 87.02.00 or 87.03.00 of the Act."
3) In case of Claris Lifesciences Ltd. v. Union of India reported in 2013 (298) ELT 45 (Guj), wherein this Court held as under:
"7. Having heard learned Counsel for the parties, we are of the opinion that the approach adopted by the Adjudicating Authority was wholly impermissible in law. At the outset, we may record that we are conscious that such order is appealable in terms of statutory appeals provided under Central Excise Act, 1944. However, we find that the Adjudicating Authority committed serious error in disregarding binding precedent and that there are absolutely no Page 44 of 60 Uploaded by RAGHUNATH R NAIR(HC00196) on Thu Apr 17 2025 Downloaded on : Fri Apr 18 21:24:52 IST 2025 NEUTRAL CITATION C/SCA/11788/2023 JUDGMENT DATED: 20/03/2025 undefined disputed facts. We would, therefore, not insist that the petitioners once again follow the same gamut of taking the appeal route. To revert back to the issue at hand, we may recall that the question of computation of education cess and secondary and higher education cess was decided finally by the Tribunal in favour of the petitioners. As of now, such decision of the Tribunal holds the field. Such decision of the Tribunal would be binding on the Adjudicating Authority. Even if the Department is of the opinion that the issue is not free from doubt, it is not open for the Adjudicating Authority to ignore the binding precedent. We may notice that under the Central Excise Act, 1944 and the Customs Act, the Department has the right to appeal even against the order- in-original passed by the Adjudicating Authority. This is in contrast to the provisions contained in the Income-Tax Act, 1961 where against an order passed by the Assessing Officer, the Department has no right to appeal. Only remedy available to the Revenue is by way of a revision against the order of the Assessing Officer that too only if it is found that such order is erroneous and prejudicial to the interest of the Revenue. Such rigors, however, Page 45 of 60 Uploaded by RAGHUNATH R NAIR(HC00196) on Thu Apr 17 2025 Downloaded on : Fri Apr 18 21:24:52 IST 2025 NEUTRAL CITATION C/SCA/11788/2023 JUDGMENT DATED: 20/03/2025 undefined are not applicable in so far as the Department's right to appeal against the order of the Adjudicating Authority is concerned under the Central Excise Act, 1944.
8. The Adjudicating Officer acts as a quasi-judicial authority. He is bound by the law of precedent and binding effect of the order passed by the higher authority or Tribunal of superior jurisdiction. If his order is thought to be erroneous by the Department, the Department can as well prefer appeal in terms of the statutory provisions contained in the Central Excise Act, 1944."
4) In case of Commissioner of Customs v. Millat Fibers reported in 2011(271) ELT 512 (Guj), wherein this Court held as under:
"7. The record of the case indicates that vide order dated 22nd February, 2005, the adjudicating authority had adjudicated on the claim of refund made by the respondents. At the relevant time, it was permissible for the adjudicating authority to go into all issues which were Page 46 of 60 Uploaded by RAGHUNATH R NAIR(HC00196) on Thu Apr 17 2025 Downloaded on : Fri Apr 18 21:24:52 IST 2025 NEUTRAL CITATION C/SCA/11788/2023 JUDGMENT DATED: 20/03/2025 undefined necessary to be looked into for the purpose of deciding the application for refund, including the aspect of unjust enrichment. The adjudicating authority after duly considering the claim of the respondent rejected part of the claim and allowed the claim to the extent of Rs.2,42,110/- and directed that the same should be appropriated against outstanding Government dues. Later on after the said order was implemented another show cause notice came to be issued calling upon the respondent to show cause as to why the refund claim of Rs.2,42,110/- sanctioned and erroneously refunded by appropriating against the outstanding Government dues should not be rejected and amount so appropriated should not be recovered under section 28 read with section 27 of the Customs Act, 1962 in absence of proof regarding burden of duty being not passed on. The very frame of the show-cause notice indicates that the adjudicating authority was reviewing the earlier order inasmuch the respondent had been called upon to show cause as to why the refund granted by the earlier order should not be rejected.
8. Sub-section (2) section 129D empowers the Commissioner of Page 47 of 60 Uploaded by RAGHUNATH R NAIR(HC00196) on Thu Apr 17 2025 Downloaded on : Fri Apr 18 21:24:52 IST 2025 NEUTRAL CITATION C/SCA/11788/2023 JUDGMENT DATED: 20/03/2025 undefined Customs to call for and examine the record of any proceeding in which an adjudicating authority subordinate to him has passed any decision or order under the Act for the purpose of satisfying himself as to the legality or propriety of any such decision or order and to direct such authority to apply to the Commissioner (Appeals) for the determination of such points arising out of the decision or order as may be specified by the Commissioner in his order. Sub-section (4) thereof provides for preferring an appeal against the order of the concerned authority. In the circumstances, if the adjudicating authority was of the view that the doctrine of unjust enrichment had not been examined while making the order of refund, the proper course to adopt was to take recourse to the provisions of section 129D. A perusal of the order-in-original dated 15.02.2006 shows that the adjudicating authority has held that the refundable amount of Rs.2,42,110/- is required to be credited to the Consumer Welfare Fund established under section 12 C of the Central Excise Act, 1944 and that the same cannot be refunded to the party by appropriating against outstanding Government dues of Rs.2,75,306/- of Customs Duty vide OIO dated Page 48 of 60 Uploaded by RAGHUNATH R NAIR(HC00196) on Thu Apr 17 2025 Downloaded on : Fri Apr 18 21:24:52 IST 2025 NEUTRAL CITATION C/SCA/11788/2023 JUDGMENT DATED: 20/03/2025 undefined 13.02.2004. Thus in effect and substance the adjudicating authority, has set aside its earlier order dated 13.2.2004 whereby the refund amount had been ordered to be appropriated against outstanding Government dues. The adjudicating authority has no power or authority under the Act to reconsider or review or sit in appeal over its earlier order. No such power or authority has been pointed out by the learned counsel for the appellant.
9. In the aforesaid factual background, the Commissioner (Appeals) was justified in holding that the show cause notice issued by the adjudicating authority on the ground of unjust enrichment, would amount to review of his own order which was not permissible.
The view expressed by the Commissioner (Appeals) that the proper course of action was for the Department to review the order under section 129D(2) of the Act and thereafter file appeal under section 129D(4) is in consonance with the provisions of the Act. The impugned order of the Tribunal whereby it has confirmed the findings recorded by the Commissioner (Appeals) does not suffer from any legal infirmity so as to warrant interference. No question of law, much less any Page 49 of 60 Uploaded by RAGHUNATH R NAIR(HC00196) on Thu Apr 17 2025 Downloaded on : Fri Apr 18 21:24:52 IST 2025 NEUTRAL CITATION C/SCA/11788/2023 JUDGMENT DATED: 20/03/2025 undefined substantial question of law can be stated to arise out of the impugned order of the Tribunal."
5) In case of Tejus Proprietary concern of Tejus Rohitkumar Kapadia v. Union of India reported in 2012 (275) ELT 175 (Bom), wherein Bombay High Court held as under:
"5. We find that the approach of the Tribunal is thoroughly misconceived. The Tribunal is duty bound to follow binding precedent. The Tribunal was under a bounden obligation to consider the position in law as expounded by the Supreme Court in Sayed Ali's case and to determine as to whether the principle was attracted to the facts of the present case. When it failed to do so in its order dated 9 May 2011, the Appellant justifiably drew the attention of the Tribunal to this aspect and sought a modification of the order. In addition, the Appellant relied upon the decision of the Supreme Court in Chandana Impex (supra) and to another decision of a coordinate Bench of the Tribunal itself. The CESTAT as a judicial body, must realize the Page 50 of 60 Uploaded by RAGHUNATH R NAIR(HC00196) on Thu Apr 17 2025 Downloaded on : Fri Apr 18 21:24:52 IST 2025 NEUTRAL CITATION C/SCA/11788/2023 JUDGMENT DATED: 20/03/2025 undefined importance of the doctrine of precedent as in our legal system. Deference to judgments of the Supreme Court is a matter of constitutional principle. Equally, unless coordinate Benches of the Tribunal have due deference and regard for decisions rendered by the Tribunal, the elements of certainty and consistency in the judicial process which lie at the heart of judicial functioning would be seriously disrupted. We are constrained to make this observation because it is necessary for Court and Tribunals to realize the importance of judicial consistency and certainty in decision making. Judges individually in the discharge of their functions are independent adjudicators.
But both individually and as constituents of institutions of which we are a part, judges are bound by a sense of judicial discipline.
That discipline is rigorous but nothing less than a strict adherence to judicial discipline can be acceptable in the work that judges discharge. Benches of a Tribunal must conform to the discipline that the doctrine of precedent exacts. The respect Page 51 of 60 Uploaded by RAGHUNATH R NAIR(HC00196) on Thu Apr 17 2025 Downloaded on : Fri Apr 18 21:24:52 IST 2025 NEUTRAL CITATION C/SCA/11788/2023 JUDGMENT DATED: 20/03/2025 undefined which independent adjudicators in our country command has been assiduously built up over small incremental steps. Consistency and certainty is an important element in the judicial process. They are foundations of the rule of law. These are not just elements of judicial tradition but form part of constitutional principle. They are as binding as a binding precedent. The Tribunal in the present case, has manifestly failed to do so. In the circumstances, while we are inclined to set aside the impugned order of the Tribunal, we do so with the observation that the approach which has been adopted by the Tribunal in the present case, was not consistent with the principles of judicial functioning. We accordingly allow the appeal and set aside the impugned orders of the Tribunal dated 9 May 2011 and 12 August 2011. We restore the application for waiver of pre-deposit to the file of the Tribunal for fresh consideration on merits. In the circumstances of the case, there shall be no order as to costs. In view of the order of remand, we answer the question of law in the affirmative with the clarification that all questions on merits are kept open to be decided by the Tribunal, including whether the Page 52 of 60 Uploaded by RAGHUNATH R NAIR(HC00196) on Thu Apr 17 2025 Downloaded on : Fri Apr 18 21:24:52 IST 2025 NEUTRAL CITATION C/SCA/11788/2023 JUDGMENT DATED: 20/03/2025 undefined notice to show cause was issued by a proper officer."
6) In case of Viacom 18 Media Pvt. Ltd v. State of Maharashtra reported in 2019(22) GSTL 338 (Bom), wherein Hon'ble Bombay High Court held as under:
"3. Brief facts are as under :
The Petitioner is a company registered under the Companies Act, 1956 and is engaged in the business of broadcasting agent earning commission on advertisements and distribution of television channels of MTV Asia LDC and Nickelodeon Asia Holdings Private Limited. The issue at stake is petitioner's transactions of distribution income/ subscription charges collected from sub-distributors whether would be faxed under the Maharashtra Value Added Tax Act, 2002 ("MVAT Act" for short). The Assessing Officer passed order of assessment under the MVAT Act and Central Sales Tax Act ("CST" for short) on 5th October, 2015 including the petitioner's distribution income in the turnover and taxed the same according to the prescribed rate.Page 53 of 60 Uploaded by RAGHUNATH R NAIR(HC00196) on Thu Apr 17 2025 Downloaded on : Fri Apr 18 21:24:52 IST 2025
NEUTRAL CITATION C/SCA/11788/2023 JUDGMENT DATED: 20/03/2025 undefined Against such order of assessment, the petitioner preferred appeal before respondent No. 2-appellate authority. Before the appellate authority, the petitioner pointed out that under similar circumstances the Deputy Commissioner of Sales Tax (Appeals) under his order dated 27th February, 2007 had accepted the petitioner's contention that the transaction in question de not invite sales tax. The relevant portion of the order of the Deputy Commissioner reads as under :
"I have gone through the
assessment record alongwith
grounds of appeal as discussed above and document submitted by the appellant including agreement made between MTV India Ltd. and Various Cable Operators. It is observed that The STO has levied Tax on Rs. 69,38,502/- treating it as taxable TO of sale under BST Act @ 4% without mentioning the schedule entry under which tax has been levied. This amount is infact the Distribution income of the appellant from India. This amount infact represent the income received by the appellant towards the subscription charges levied on the viewers, which are in turn collected through local Cable operator. This subscription Page 54 of 60 Uploaded by RAGHUNATH R NAIR(HC00196) on Thu Apr 17 2025 Downloaded on : Fri Apr 18 21:24:52 IST 2025 NEUTRAL CITATION C/SCA/11788/2023 JUDGMENT DATED: 20/03/2025 undefined charges are levied against the Audio & Visual Transmission received by the viewer on his Television set. These are received as "radio waves on the antenna installed by cable operator : who in turn distribute these signals through cable in his local area.
This fact was confirmed from the copies of agreement between appellant and various cable operators which are brought on record. So it is clear that the said income does not arise out of sale of goods defined in BST Act, 1959.
As per Hon'ble Supreme Court judgment in case of M/s. BSNL Ltd. It is decided that goods do not include electromagnetic waves on Radio frequences.
As appellant's goods are of electromagnetic waves were squarely covered by above referred judgment, hence Sales Tax levied on distribution income on account of transmission of electromagnetic waves is deleted and consequential interest is also deleted regarding levy of PT at Rs. 20,728/-, the appellant has not given any details to context this claim of non-levy, hence PIT is confirmed and the Re-assessment order passed by the STO is hereby set aside, Page 55 of 60 Uploaded by RAGHUNATH R NAIR(HC00196) on Thu Apr 17 2025 Downloaded on : Fri Apr 18 21:24:52 IST 2025 NEUTRAL CITATION C/SCA/11788/2023 JUDGMENT DATED: 20/03/2025 undefined hence, the assessment order dated 30-9-2005 stands.
ORDER The appeal is allowed. The Re- assessment order is hereby set aside and assessment order dated 30-9-2005 stands. The STO is directed to grant the refund of Rs. 20,000/- paid as part payment as per the provisions of law." xxx "7. Having heard learned counsel for the parties and having perused documents on record, we are not satisfied at all in the manner in which respondent No.2 has rejected the petitioner's contention of an earlier appellate order concluding the issue of taxability of the transaction in question. If the factual aspects or law had undergone any change since the order was passed by the Deputy Commissioner on 12th January, 2007, the same has not been brought on record nor stated in the impugned order. In absence of difference in relevant facts or applicable legal provisions of development of law at the hands of higher authority or court, the respondent No. 2 could not have taken a decision different from what the Deputy Commissioner in Page 56 of 60 Uploaded by RAGHUNATH R NAIR(HC00196) on Thu Apr 17 2025 Downloaded on : Fri Apr 18 21:24:52 IST 2025 NEUTRAL CITATION C/SCA/11788/2023 JUDGMENT DATED: 20/03/2025 undefined his order dated 12th October, 2007 had done. ....."
7) In case of Padma Raghavan v. Assistant Commissioner of C. Ex Mettupalayam reported in 2018 (8) GSTL 108 (Mad.), wherein Hon'ble Madras High Court held as under:
"4. The petitioner was engaged in the business of textile printing and processing of fabrics. The petitioner paid a duty of Rs. 48,767/- on 30-9-1996. Thereafter, the Deputy Commissioner on enquiry held that the duty levied was incorrect and passed an order dated 22-10-1997. Aggrieved by such order, the petitioner preferred appeal to the Commissioner of Central Excise and Customs (Appeals), who by order dated 27-8-1998, reduced the duty to Rs. 3,446/-. This order became final. Therefore, the petitioner filed an application for refund of the balance amount of Rs. 45,332/- on 23-9-1998. This refund accrued to the petitioner only after the appeal was allowed by the second respondent by order dated 27-8- Page 57 of 60 Uploaded by RAGHUNATH R NAIR(HC00196) on Thu Apr 17 2025 Downloaded on : Fri Apr 18 21:24:52 IST 2025 NEUTRAL CITATION C/SCA/11788/2023 JUDGMENT DATED: 20/03/2025 undefined 1998, reducing the duty. Thus, the application was well within the period of two months from the date on which the order passed by the appellate authority. The first respondent considered the application for refund and passed an order dated 21-1-1999, ordering refund, but directing payment of amount to the Consumer Welfare Fund. Once again, the petitioner filed appeal before the Commissioner, who by order dated 21-6-2001, allowed the appeal, holding that since this was duty paid on demand, there was no question of the petitioner passing on the duty burden to any consumer, and therefore, the petitioner was entitled to refund in its entirety. There was also a positive direction to grant refund. Unfortunately, the first respondent, who appears to have assumed the role, as being guardian of State finances, has passed the impugned order, holding that the claim for refund is hit by limitation. The attempt of the first respondent is to somehow circumvent the order passed by the Commissioner (Appeals). This attempt cannot be encouraged and such attempts have been deprecated by the Hon'ble Supreme Court as pointed above. These are all sufficient reasons to hold that the impugned order deserves to be Page 58 of 60 Uploaded by RAGHUNATH R NAIR(HC00196) on Thu Apr 17 2025 Downloaded on : Fri Apr 18 21:24:52 IST 2025 NEUTRAL CITATION C/SCA/11788/2023 JUDGMENT DATED: 20/03/2025 undefined set aside.
5. Accordingly, this writ petition is allowed, the impugned order set aside and the first respondent is directed to effect refund as ordered in Appeal No. 133 of 2001, dated 21-6-2001 within a period of eight weeks from the date of receipt of a copy of this order along with applicable interest under Section 11BB of the Central Excise Act, 1944. No costs."
37. In view of above conspectus of law and in view of settled legal position, respondent no.2 could not have taken a different view or opinion than what is held by his predecessor which has achieved finality.
38. In view of above, petition succeeds and is accordingly allowed. The impugned order passed by Commissioner (Appeals) dated 18/19.5.2023 is hereby quashed and set aside and the order granting refund to Page 59 of 60 Uploaded by RAGHUNATH R NAIR(HC00196) on Thu Apr 17 2025 Downloaded on : Fri Apr 18 21:24:52 IST 2025 NEUTRAL CITATION C/SCA/11788/2023 JUDGMENT DATED: 20/03/2025 undefined the petitioner is hereby restored. Rule is made absolute to the aforesaid extent. No order as to costs.
(BHARGAV D. KARIA, J) (D.N.RAY,J) RAGHUNATH R NAIR Page 60 of 60 Uploaded by RAGHUNATH R NAIR(HC00196) on Thu Apr 17 2025 Downloaded on : Fri Apr 18 21:24:52 IST 2025