Facts of the Case

The Commissioner of CGST and Central Excise Jammu filed the present appeal under Section 35G of the Central Excise Act, 1944 against an order of the Customs, Excise and Service Tax Appellate Tribunal, Chandigarh (“CESTAT”).

The dispute formed part of a broader set of cases in which the Revenue had challenged different CESTAT orders. In those matters, CESTAT had set aside the orders passed by the Commissioner (Appeals) and the Adjudicating Authority and had directed refund of Education Cess and Secondary & Higher Education Cess to the assessees.

The refund direction was stated in the order to have been granted in view of the Supreme Court decision in M/s SRD Nutrients Pvt. Ltd. vs Commissioner of Central Excise, Guwahati, reported as 2017 (335) ELT 481 (SC).

The High Court specifically recorded that an earlier batch of Revenue appeals, together with applications seeking condonation of delay, had already been dismissed by a Coordinate Bench through judgment dated 23 May 2022, with CEA No. 10/2022 being the lead case.

Upon examining the present appeal, the Court found that the challenge was directed against a similar order, involved almost identical grounds, and raised matters already dealt with by the Coordinate Bench in its judgment dated 23 May 2022. These facts are expressly recorded on pages 1 and 2 of the uploaded order.

Issues Involved

The principal issues arising from the order were:

  1. Whether the Revenue’s appeal under Section 35G of the Central Excise Act, 1944 against the CESTAT order directing refund of Education Cess and Secondary & Higher Education Cess could survive when an earlier batch of substantially similar appeals had already been dismissed by a Coordinate Bench.
  2. Whether the present appeal raised any materially distinct ground requiring an independent result despite the judgment dated 23 May 2022 in the earlier batch of appeals.
  3. Whether parity and consistency required dismissal of the present appeal on the same terms and conditions as the earlier Coordinate Bench judgment.
  4. Whether any subsisting interim directions should continue after dismissal of the appeal.

Appellant’s / Revenue’s Arguments

The uploaded order is brief and does not separately reproduce detailed submissions advanced by the Commissioner of CGST and Central Excise Jammu. Therefore, no argument should be attributed to the Revenue beyond what is expressly discernible from the judicial record.

From the order, it is clear that:

  • the Commissioner challenged the CESTAT order under Section 35G of the Central Excise Act, 1944;
  • the impugned CESTAT order was similar to orders involved in the earlier batch of appeals;
  • the Revenue’s challenge rested on almost identical grounds to those already considered by the Coordinate Bench; and
  • those grounds had already been dealt with in the judgment dated 23 May 2022.

Accordingly, the essential Revenue position reflected in the order was a challenge to the CESTAT’s grant of refund of Education Cess and Secondary & Higher Education Cess.

Respondent’s Arguments

The respondent was Sun Pharmaceutical Industries, located at 69 EPIP Kartholi, Bari Brahmana, Jammu.

The order records “None” under appearance for the respondent. Consequently, the uploaded judgment does not record any oral or written argument separately advanced on behalf of the respondent at the hearing.

It would therefore be inaccurate to invent or infer detailed respondent submissions not contained in the judicial order.

Court Order / Findings

The High Court dismissed the Revenue’s appeal.

The Court’s material findings were:

  • It examined the contents of the instant appeal.
  • It found that the appeal challenged a similar order to those involved in the earlier batch of appeals.
  • The grounds were found to be almost identical.
  • Those grounds had already been dealt with by the Coordinate Bench in its judgment dated 23 May 2022.
  • To maintain parity, the Court dismissed the present appeal on the same terms and conditions as laid down in the earlier Coordinate Bench judgment.
  • Any subsisting interim directions were ordered to stand vacated.

Thus, the operative basis of dismissal was the Court’s finding that the present matter was materially aligned with the earlier batch already decided by the Coordinate Bench.

Important Clarification

A crucial clarification is necessary for an accurate legal reading of this order:

First, the High Court’s two-page order does not contain an elaborate fresh adjudication on the substantive merits of the Education Cess refund controversy. Instead, it dismisses the appeal because the challenge concerned a similar order, was based on almost identical grounds, and those grounds had already been addressed in the Coordinate Bench judgment dated 23 May 2022.

Second, the order refers to the Supreme Court decision 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 CESTAT had directed refund in the underlying class of matters. The High Court’s order should not be overstated as containing a detailed independent restatement of the entire ratio of that Supreme Court decision.

Third, the earlier Coordinate Bench judgment dated 23 May 2022 is central to the outcome because the present appeal was expressly dismissed on the same terms and conditions as that earlier judgment.

Fourth, since the respondent was not represented according to the appearance portion of the order, no detailed respondent argument should be manufactured or attributed to Sun Pharmaceutical Industries.

Fifth, the order also expressly vacated any interim directions subsisting as on the date of dismissal.

Sections Involved

Section 35G of the Central Excise Act, 1944 – The provision expressly referred to in the order under which the Commissioner filed appeals before the High Court against the CESTAT orders.

Education Cess and Secondary & Higher Education Cess – These were the levies forming the subject matter of the refund directions discussed in the order.

Link to download the order -https://mytaxexpert.co.in/uploads/1783158069_876compressed.pdf

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