Facts of the Case

  • The Appellant, the Commissioner of CGST and Central Excise Jammu, filed an appeal under Section 35G of the Central Excise Act, 1944 (referred to as 'the Act'), challenging an order passed by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chandigarh.
  • The underlying dispute arose after the CESTAT set aside prior orders issued by the Commissioner (Appeals) and the Adjudicating Authority.
  • The CESTAT had directed the tax authorities to issue a refund of the Education Cess and Secondary & Higher Education Cess to the Assessee/Respondent, Sun Pharma Laboratories Ltd., Sidco IGC, Samba J&K.
  • The CESTAT’s direction for granting the refund was heavily reliant on the precedent established by the Hon’ble Supreme Court of India in the landmark case of M/s SRD Nutrients Pvt. Ltd. V. Commissioner of Central Excise, Guwahati, reported as 2017 (335) ELT 481 (SC).
  • The Revenue Department preferred this specific appeal (CEA No. 333/2022) alongside civil applications for the condonation of delay (CM Nos. 6690/2022 and 6691/2022).
  • The High Court noted that this appeal belonged to a broader batch of identical appeals filed by the Commissioner, Central GST and Central Excise (Jammu and Kashmir), Jammu, where the lead case was designated as CEA No. 10/2022.

Issues Involved

  • Whether the appeal preferred by the Revenue under Section 35G of the Central Excise Act, 1944 against the CESTAT order directing the refund of Education Cess and Secondary & Higher Education Cess can be entertained when identical challenges have already been adjudicated and dismissed by a Coordinate Bench.
  • Whether judicial discipline and the principle of parity require the dismissal of the current appeal on the same terms and conditions as established in the Coordinate Bench's judgment dated May 23, 2022.

Petitioner’s Arguments

  • The Appellant (Commissioner of CGST and Central Excise Jammu), represented by Advocate Mr. Jagpaul Singh, contended that the CESTAT erred in reversing the orders of the Adjudicating Authority and the Commissioner (Appeals).
  • The Revenue sought to challenge the merits of the CESTAT's decision regarding the allowability and refund mechanisms of the Education Cess and Secondary & Higher Education Cess under the provisions of the Central Excise Act.
  • The Revenue intended to distinguish or challenge the application of the legal principles derived from the Supreme Court's ruling in M/s SRD Nutrients Pvt. Ltd. V. Commissioner of Central Excise, Guwahati.

Respondent’s Arguments

  • No one appeared on behalf of the Respondent, Sun Pharma Laboratories Ltd., at the time of the oral judgment.
  • However, the record indicates that the Respondent's position stood vindicated by the CESTAT's order, which properly applied the Supreme Court judgment in M/s SRD Nutrients Pvt. Ltd. to secure their entitlement to the refund of the Education Cess and Secondary & Higher Education Cess.

Court Order / Findings

  • The Division Bench of the High Court of Jammu & Kashmir and Ladakh, comprising Hon'ble the Chief Justice Ali Mohammad Magrey and Hon'ble Mr. Justice Vinod Chatterji Koul, reviewed the contents of the appeal.
  • The Court observed that the challenge thrown in this appeal was identical in grounds and subject matter to a batch of appeals previously considered and decided by a Coordinate Bench of the same Court.
  • The Coordinate Bench had already dismissed the Revenue's batch of appeals, including the lead case CEA No. 10/2022, via a comprehensive judgment dated May 23, 2022.
  • To maintain judicial discipline, consistency, and parity, the High Court held that this appeal must meet the same fate.
  • Consequently, the High Court dismissed the appeal on the same terms and conditions as laid down in the judgment dated May 23, 2022, and ordered that any subsisting interim directions be vacated.

Important Clarification

  • The judgment reinforces the doctrine of precedents and judicial parity within the High Court. When a Coordinate Bench has comprehensively settled the legal validity of an issue—specifically the revenue's challenge against cess refunds following the SRD Nutrients case—subsequent identical appeals by the Revenue cannot be re-litigated and will be dismissed on the same terms.

Section Involved

  • Section 35G of the Central Excise Act, 1944: Provisions relating to filing an appeal to the High Court from every order passed in appeal by the Appellate Tribunal (CESTAT), provided a substantial question of law is involved.

Link to download the order -https://mytaxexpert.co.in/uploads/1783312794_903compressed.pdf

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