Facts of the Case

The Commissioner of CGST and Central Excise Jammu filed the present appeal before the High Court under Section 35G of the Central Excise Act, 1944 against an order of the Customs, Excise and Service Tax Appellate Tribunal, Chandigarh.

The dispute arose from the CESTAT order whereby the Tribunal had set aside the orders passed by the Commissioner (Appeals) and the Adjudicating Authority and directed refund of Education Cess and Secondary & Higher Education Cess to the assessee.

The Tribunal’s relief was based on the decision of the Supreme Court in M/s SRD Nutrients Pvt. Ltd. vs Commissioner of Central Excise, Guwahati, 2017 (335) ELT 481 (SC).

The High Court recorded that a batch of similar appeals had earlier been filed by the Commissioner, Central GST and Central Excise (Jammu and Kashmir), Jammu under Section 35G of the Act against different CESTAT orders granting refunds of Education Cess and Secondary & Higher Education Cess. Those appeals, together with applications seeking condonation of delay, had already been dismissed by a Coordinate Bench of the High Court by judgment dated 23 May 2022, with CEA No. 10/2022 being the lead case.

 Issues Involved

The principal issues arising from the appeal were:

  1. Whether the Revenue’s challenge under Section 35G of the Central Excise Act, 1944 against the CESTAT order directing refund of Education Cess and Secondary & Higher Education Cess could be entertained when substantially similar appeals had already been dismissed by a Coordinate Bench.
  2. Whether the present appeal raised grounds materially different from those already considered and dealt with in the earlier batch of appeals decided on 23 May 2022.
  3. Whether, for maintaining consistency and parity in judicial decisions, the present appeal was liable to be dismissed on the same terms and conditions as the earlier batch judgment.
  4. Whether any subsisting interim directions were required to continue after dismissal of the appeal.

 Appellant’s / Revenue’s Case

The Commissioner of CGST and Central Excise Jammu challenged the CESTAT order under Section 35G of the Central Excise Act, 1944.

The challenge concerned the Tribunal’s decision setting aside the orders of the Commissioner (Appeals) and the Adjudicating Authority and directing refund of Education Cess and Secondary & Higher Education Cess to the assessee.

However, the High Court specifically observed that the challenge in the present appeal was against a similar order to those involved in the earlier batch of appeals and was founded on almost identical grounds that had already been dealt with by the Coordinate Bench in its judgment dated 23 May 2022.

 Respondent’s Position

The respondent was M/s Cadila Pharmaceuticals Ltd., IGC, Samba, Jammu.

The order records that none appeared for the respondent at the hearing. Therefore, the judgment does not set out any separate oral submissions or detailed arguments advanced on behalf of the respondent.

Nevertheless, the respondent stood as beneficiary of the CESTAT order under challenge, under which the earlier departmental orders had been set aside and refund of Education Cess and Secondary & Higher Education Cess had been directed in view of the Supreme Court ruling in M/s SRD Nutrients Pvt. Ltd. vs Commissioner of Central Excise, Guwahati.

 Court’s Findings

The High Court examined the contents of the present appeal and found that:

  • the order challenged in the present proceedings was similar to the orders involved in the earlier batch of appeals;
  • the earlier batch had already been considered and decided by a Coordinate Bench;
  • the grounds raised in the present appeal were almost identical to those already dealt with in the earlier judgment dated 23 May 2022; and
  • there was therefore no basis for treating the present appeal differently from the earlier batch.

The Court expressly adopted the principle of maintaining parity with the earlier decision.

The operative reasoning of the Court was that, since an almost identical controversy had already been addressed by the Coordinate Bench, the present appeal should be dismissed on the same terms and conditions as contained in the judgment dated 23 May 2022.

 Court Order

The High Court dismissed the Revenue’s appeal.

The dismissal was ordered on the same terms and conditions as laid down in the Coordinate Bench judgment dated 23 May 2022.

The Court further directed that:

Interim direction(s), if any subsisting as on date, shall stand vacated.

Accordingly, the appeal filed by the Commissioner of CGST and Central Excise Jammu did not succeed.

 Important Clarification

This order is particularly important because the High Court did not undertake a fresh detailed adjudication of the underlying refund controversy independently in this two-page order. Instead, the Court dismissed the appeal because:

  • a batch of similar appeals had already been dismissed;
  • the present challenge concerned a similar order;
  • the grounds were almost identical; and
  • judicial parity required the same treatment.

Therefore, the correct legal reading is that the present appeal was dismissed on parity with the earlier Coordinate Bench judgment dated 23 May 2022, rather than through a newly elaborated independent determination of every substantive question relating to Education Cess and Secondary & Higher Education Cess.

It is also important that the order refers to the Supreme Court ruling in M/s SRD Nutrients Pvt. Ltd. vs Commissioner of Central Excise, Guwahati, 2017 (335) ELT 481 (SC) as the decision in view of which the CESTAT had directed refund. The present High Court order records that background but principally rests its own dismissal on the earlier batch judgment and the need to maintain parity.

 Section Involved

Section 35G of the Central Excise Act, 1944

The departmental appeal before the High Court was filed under Section 35G of the Central Excise Act, 1944.

In the context of the present matter, the provision formed the statutory basis for the Revenue’s appeal against the order passed by the CESTAT.

Link to download the order-https://mytaxexpert.co.in/uploads/1783157744_875compressed.pdf

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