Facts of the Case

The Commissioner of CGST and Central Excise, Jammu filed an appeal before the High Court of Jammu & Kashmir and Ladakh at Jammu under Section 35G of the Central Excise Act, 1944 against an order concerning M/s Sun Pharmaceuticals Industries, Bari Brahna, Jammu.

The Court recorded that a batch of similar appeals had earlier been filed by the Commissioner, Central GST and Central Excise (Jammu and Kashmir), Jammu against orders passed by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chandigarh.

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
  • Secondary & Higher Education Cess

to the assessees, relying upon 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 further noted that the earlier batch of appeals, along 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.

In the present appeal, the Court found that the challenge was directed against a similar order and was based on almost identical grounds already considered by the Coordinate Bench. The uploaded order expressly records these aspects on pages 1 and 2.

Issues Involved

The principal issues arising from the order were:

  • Whether the Revenue’s appeal under Section 35G of the Central Excise Act, 1944 against the CESTAT order concerning refund of Education Cess and Secondary & Higher Education Cess required separate adjudication when substantially similar appeals had already been dismissed by a Coordinate Bench.
  • Whether the High Court should maintain parity with its earlier judgment dated 23 May 2022 in the batch of similar appeals led by CEA No. 10/2022.
  • Whether an appeal raising almost identical grounds against a similar order could be sustained after those grounds had already been dealt with by the Coordinate Bench.
  • Whether the CESTAT-linked refund dispute concerning Education Cess and Secondary & Higher Education Cess warranted interference in the present appeal.

Appellant’s / Revenue’s Arguments

The appellant was the Commissioner of CGST and Central Excise Jammu.

From the order, the Revenue’s challenge may be stated strictly within the recorded scope as follows:

  • The appeal was filed under Section 35G of the Central Excise Act, 1944.
  • The challenge concerned an order similar to those involved in the earlier batch of appeals.
  • The grounds raised were found by the High Court to be almost identical to the grounds already considered and dealt with by the Coordinate Bench in its judgment dated 23 May 2022.
  • The broader controversy arose from CESTAT orders setting aside the orders of the Commissioner (Appeals) and Adjudicating Authority and directing refund of Education Cess and Secondary & Higher Education Cess.

Important note: The two-page order does not separately reproduce detailed ground-wise submissions of the Revenue. Therefore, no additional argument should be attributed to the appellant beyond what is recorded in the judicial order.

Respondent’s Arguments

The respondent was M/s Sun Pharmaceuticals Industries, Bari Brahna, Jammu.

The order specifically records:

“Through: None.”

Accordingly, no detailed oral or written arguments on behalf of the respondent are reproduced in the order. It would therefore be inaccurate to create or infer specific submissions that do not appear in the judicial record.

Court Order / Findings

The High Court dismissed the Revenue’s appeal.

The Court’s principal findings were:

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

The operative conclusion appearing on page 2 of the uploaded order is therefore based expressly on similarity of the challenged order, identity of grounds already considered, and the need to maintain parity with the earlier Coordinate Bench judgment.

Important Clarification

This order should be understood with the following important qualifications:

  • The High Court did not undertake a fresh detailed merits analysis of the Education Cess and Secondary & Higher Education Cess refund controversy in this two-page order.
  • The appeal was dismissed primarily because the Court found the matter to involve a similar order and almost identical grounds already dealt with by a Coordinate Bench.
  • The controlling immediate basis of dismissal was the earlier High Court judgment dated 23 May 2022, with the Court expressly invoking the need to maintain parity.
  • Although the order refers to M/s SRD Nutrients Pvt. Ltd. vs Commissioner of Central Excise, Guwahati, 2017 (335) ELT 481 (SC) as the Supreme Court decision relied upon in the underlying CESTAT refund matters, the present High Court order does not independently undertake a detailed examination of that Supreme Court precedent.
  • The precise ratio, terms and conditions of the Coordinate Bench judgment dated 23 May 2022 cannot safely be expanded beyond this order unless that earlier judgment is separately examined.
  • The dismissal also resulted in vacation of any interim directions subsisting on the date of the order.

Sections Involved

  • Section 35G of the Central Excise Act, 1944 – Statutory provision under which the appeal was filed before the High Court.
  • Education Cess provisions – Relevant to the underlying refund controversy referred to in the order; the uploaded order does not specify a particular section for the levy/refund.
  • Secondary & Higher Education Cess provisions – Relevant to the underlying refund controversy; the uploaded order does not identify a specific statutory section.
  • Appellate jurisdiction of the High Court under Section 35G – Central to the maintainability and adjudication of the Revenue appeal.

 Link to download the order-https://mytaxexpert.co.in/uploads/1783159496_882compressed.pdf

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