Facts of the Case

  • The Appellant, the Commissioner of Central GST and Central Excise (Jammu and Kashmir), Jammu, preferred an appeal under Section 35G of the Central Excise Act, 1944.
  • The appeal was directed against an order passed by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chandigarh.
  • The CESTAT had previously set aside the orders passed by the Commissioner (Appeals) and the Adjudicating Authority, thereby directing the department to refund the Education Cess and Secondary & Higher Education Cess to the respondent-assessee, M/S Shiva Mint Industries.
  • The CESTAT's directions for refund were heavily based upon the judgment rendered by the Hon'ble Supreme Court of India in the case of M/s SRD Nutrients Pvt. Ltd. V. Commissioner of Central Excise, Guwahati, reported as 2017 (335) ELT 481 (SC).
  • A whole batch of identical appeals, including applications seeking condonation of delay (with the lead case being CEA No. 10/2022), had already been dismissed by a Coordinate Bench of the High Court of Jammu & Kashmir and Ladakh via a judgment dated May 23, 2022.
  • The present appeal (CEA No. 340/2022) raised the exact same issues and challenged a similar CESTAT order on identical grounds.

Issues Involved

  • Whether the Revenue’s appeal under Section 35G of the Central Excise Act, 1944, challenging the refund of Education Cess and Secondary & Higher Education Cess, could be sustained when identical appeals on the same grounds had already been dismissed by a Coordinate Bench of the High Court.
  • Whether judicial discipline and the principle of parity mandate the dismissal of subsequent identical appeals filed by the Revenue against orders granting refunds based on the Supreme Court ruling in M/s SRD Nutrients Pvt. Ltd..

Petitioner’s (Appellant's) Arguments

  • The Appellant (Commissioner of CGST and Central Excise, Jammu), represented by counsel Mr. Jagpaul Singh, argued that the orders passed by the Adjudicating Authority and the Commissioner (Appeals) denying the refund of Education Cess and Secondary & Higher Education Cess were legally sustainable and should not have been set aside by the CESTAT.
  • The Revenue threw a challenge against the CESTAT Chandigarh's directives on grounds intended to contest the applicability or scope of the refund mechanism for Education Cess and Secondary & Higher Education Cess within the region.

Respondent’s Arguments

  • No one appeared on behalf of the Respondent, M/S Shiva Mint Industries, when the matter was called up for hearing.
  • However, the underlying record indicated that the Respondent's case rested entirely on the established legal precedent laid down by the Apex Court in M/s SRD Nutrients Pvt. Ltd. V. Commissioner of Central Excise, Guwahati, which mandated the refund of Education Cess and Secondary & Higher Education Cess where the principal excise duty was exempt.

Court Order / Findings

  • The Division Bench comprising Hon'ble the Chief Justice Ali Mohammad Magrey and Hon'ble Mr. Justice Vinod Chatterji Koul carefully perused the contents of the appeal.
  • The Court explicitly noticed that the challenge thrown by the Revenue in this appeal was directed against an order identical to the ones that formed the subject matter of a whole batch of appeals previously considered and decided by a Coordinate Bench of the High Court.
  • The High Court observed that the grounds raised by the Appellant in the instant case were almost completely identical to the grounds that had already been extensively dealt with and rejected by the Coordinate Bench in its Judgment dated May 23, 2022.
  • With a view to maintaining judicial parity and strict consistency in judicial pronouncements, the Bench held that the present appeal deserved the same fate as the earlier batch.
  • Consequently, the High Court dismissed the appeal on the same terms and conditions as laid down in the landmark judgment dated May 23, 2022, passed by the Coordinate Bench.
  • The Court further ordered that interim directions, if any subsisting as on that date, stood vacated.

Important Clarification

  • This judgment reinforces the rule of Judicial Parity. When a Coordinate Bench of a High Court has already adjudicated upon a specific set of facts and legal questions (such as the refund of cesses post the SRD Nutrients ruling), a subsequent bench of equal strength will maintain consistency by dismissing similar appeals on the exact same terms.

Section Involved

  • Section 35G of the Central Excise Act, 1944: This section provides for filing an appeal to the High Court from every order passed in appeal by the Appellate Tribunal (CESTAT), provided the High Court is satisfied that the case involves a substantial question of law.

Link to download the order -https://mytaxexpert.co.in/uploads/1783312655_902compressed.pdf

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