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 formed part of a broader batch of appeals filed by the Commissioner, Central GST and Central Excise (Jammu and Kashmir), Jammu against orders passed on different dates by CESTAT. 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 Tribunal’s approach 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 the earlier batch of 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. The present appeal challenged a similar order on almost identical grounds.

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 was maintainable or required separate consideration when substantially identical appeals had already been dismissed by a Coordinate Bench.
  2. Whether the present appeal raised any materially distinct ground warranting a departure from the judgment dated 23 May 2022 passed in the earlier batch of appeals.
  3. Whether, in view of the almost identical grounds and similar nature of the challenged CESTAT order, the principle of parity required dismissal of the present appeal on the same terms and conditions as the earlier batch.

Appellant’s / Revenue’s Arguments

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

From the Court’s recorded order, the Revenue’s challenge concerned a CESTAT decision similar to those involved in the earlier batch of appeals. The challenged Tribunal orders had set aside the orders of the Commissioner (Appeals) and the Adjudicating Authority and had directed refund of Education Cess and Secondary & Higher Education Cess to the assessee.

The High Court specifically observed that the present challenge was founded on almost identical grounds to those already considered and dealt with by the Coordinate Bench in its judgment dated 23 May 2022.

Important note: The short order does not separately reproduce detailed proposition-wise submissions advanced on behalf of the appellant. Therefore, no additional argument should be attributed to the Revenue beyond what is expressly reflected in the judgment.

Respondent’s Arguments

The judgment records “None” under the appearance for the respondent.

Accordingly, the order does not set out any separate oral or written submissions made on behalf of Sun Pharmaceutical in the present proceedings. No independent respondent argument should therefore be inferred or added beyond the contents of the judicial order.

Court Order / Findings

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

  • the appeal challenged an order similar to those forming the subject matter of the earlier batch of appeals;
  • the grounds raised were almost identical to the grounds already considered by the Coordinate Bench;
  • those grounds had already been dealt with in the judgment dated 23 May 2022; and
  • parity in judicial treatment was therefore required.

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

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

Important Clarification

This order is significant because the High Court did not undertake a fresh detailed adjudication of the cess-refund controversy on merits in the present appeal. Instead, the Court found that the challenged order and grounds were substantially similar to those already considered in the earlier batch and dismissed the present appeal to maintain parity with the Coordinate Bench judgment dated 23 May 2022.

Therefore, the precise ratio of the present order should be understood carefully: where the Revenue’s appeal challenged a similar CESTAT order on almost identical grounds already dealt with by the Coordinate Bench, the High Court followed the earlier judgment and dismissed the appeal on the same terms and conditions.

It is also important that the present two-page order refers to the earlier batch judgment but does not reproduce the complete reasoning of that judgment. Accordingly, the broader legal reasoning of the 23 May 2022 decision should not be assumed beyond what is expressly recorded in this order.

Sections Involved

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

Subject Matter: Refund of Education Cess and Secondary & Higher Education Cess. 

Link to download the order -https://mytaxexpert.co.in/uploads/1783160906_888compressed.pdf

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