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.

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 refund direction was connected with the principle applied in the Supreme Court decision in M/s SRD Nutrients Pvt. Ltd. vs Commissioner of Central Excise, Guwahati, 2017 (335) ELT 481 (SC).

The High Court noted that a batch of similar appeals had earlier been filed by the Commissioner, Central GST and Central Excise (Jammu and Kashmir), Jammu. Those appeals, together with applications seeking condonation of delay, had 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 order challenged was similar to the orders involved in the earlier batch and that the grounds raised were almost identical to grounds already dealt with by the Coordinate Bench.

Issues Involved

  • 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 was maintainable or required separate consideration when substantially similar appeals had already been dismissed by a Coordinate Bench.
  • Whether the CESTAT order granting refund to the assessee, in the context of the decision in M/s SRD Nutrients Pvt. Ltd. vs Commissioner of Central Excise, Guwahati, warranted interference by the High Court.
  • Whether parity and judicial consistency required dismissal of the present appeal on the same terms and conditions as the earlier judgment dated 23 May 2022.
  • Whether grounds already dealt with in the earlier batch of appeals could justify a different result in the present case.

Petitioner/Appellant’s Arguments

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

From the order, the Revenue’s 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.

The appellant sought judicial interference with the similar refund order passed by CESTAT. However, the High Court specifically observed that the challenge was raised on almost identical grounds to those already considered and dealt with by the Coordinate Bench in the earlier batch decided on 23 May 2022.

Important note: The short order does not separately reproduce detailed ground-wise submissions of the appellant beyond recording the nature of the challenge and its similarity with the earlier batch. Therefore, no additional argument should be attributed to the Revenue beyond what appears from the order.

Respondent’s Arguments

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

The order records “None” under appearance for the respondent. Accordingly, the judgment does not record any separate oral or written submissions advanced on behalf of the respondent at the hearing.

The respondent nevertheless stood as beneficiary of the CESTAT order directing refund of Education Cess and Secondary & Higher Education Cess.

Important note: Since no respondent-side arguments are recorded in the order, no detailed submissions should be inferred or created beyond the contents of the judgment.

Court Order / Findings

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

  • The challenge was directed against a similar order to those involved in the earlier batch of appeals.
  • The grounds raised were almost identical to grounds already considered and dealt with by the Coordinate Bench.
  • The earlier batch, with CEA No. 10/2022 as the lead case, had already been dismissed by judgment dated 23 May 2022.
  • Judicial parity required the present matter to receive the same treatment.

Accordingly, the High Court dismissed the appeal on the same terms and conditions as laid down in the Coordinate Bench judgment dated 23 May 2022.

The Court further directed that any interim direction(s) subsisting as on the date of the order would stand vacated.

Important Clarification

The present order is particularly important for the principle of parity and consistency in adjudication of substantially similar Revenue appeals. The High Court did not undertake a fresh, elaborate determination of the entire cess-refund controversy in this two-page order. Instead, it found that:

  • the challenged order was similar to those involved in the earlier batch;
  • the grounds were almost identical;
  • those grounds had already been dealt with by the Coordinate Bench; and
  • the appeal should therefore be dismissed on the same terms and conditions as the judgment dated 23 May 2022.

Accordingly, the case should not be overstated as containing a fresh independent and exhaustive ruling on every substantive aspect of refund of Education Cess and Secondary & Higher Education Cess. Its immediate ratio, as reflected in the order, is the dismissal of a materially similar appeal in order to maintain parity with the earlier Coordinate Bench decision.

A further clarification is necessary regarding the cited Supreme Court precedent. The High Court recorded that the CESTAT refund directions in the batch of matters were given in view of M/s SRD Nutrients Pvt. Ltd. vs Commissioner of Central Excise, Guwahati, 2017 (335) ELT 481 (SC). The short order itself does not reproduce or independently re-examine the full ratio of that Supreme Court judgment.

Sections Involved

  • Section 35G of the Central Excise Act, 1944 — Statutory provision under which the Commissioner filed the appeal before the High Court against the CESTAT order.
  • Education Cess provisions — Substantive levy/refund component forming part of the dispute before the Tribunal and in the Revenue’s appeal.
  • Secondary & Higher Education Cess provisions — Substantive levy/refund component involved in the CESTAT refund direction challenged by the Revenue.

Clarification: The uploaded order expressly identifies Section 35G of the Central Excise Act, 1944. It does not specify separate section numbers governing the two cesses; therefore, additional section numbers should not be inserted without support from the underlying record.

 Link to Download the Order-https://mytaxexpert.co.in/uploads/1783159903_884compressed.pdf

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