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 against the respondent, M/S Emcure Pharmaceuticals Ltd.
  • 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 of the Commissioner (Appeals) and the Adjudicating Authority, thereby directing the revenue department to issue a refund of the Education Cess and Secondary & Higher Education Cess (SHEC) to the assessee.
  • The CESTAT's direction for refunding the cesses was based on the landmark decision 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).
  • Along with the main appeal (CEA No. 336/2022), the revenue department filed applications seeking condonation of delay (CM Nos. 6710/2022 and 6711/2022).

Issues Involved

  1. Whether the appeal filed by the Revenue challenging the CESTAT order directing the refund of Education Cess and Secondary & Higher Education Cess can be entertained, given that an identical batch of appeals had already been adjudicated upon by a Coordinate Bench of the same High Court.
  2. Whether the principles of parity and judicial discipline require the dismissal of the current revenue appeal in identical terms to the lead judgment delivered by the Coordinate Bench on May 23, 2022.

Petitioner’s (Appellant's) Arguments

  • The Revenue, represented by learned counsel Mr. Jagpaul Singh, argued against the CESTAT Chandigarh's directives that allowed the refund of the Education Cess and Secondary & Higher Education Cess to the respondent-assessee.
  • The appellant threw a challenge against the CESTAT's order on grounds challenging the absolute applicability or continuity of the refund mechanism derived from the M/s SRD Nutrients Pvt. Ltd. Supreme Court ruling.
  • The department filed applications for condonation of delay to allow the substantive matter to be heard on merits under Section 35G of the Act.

Respondent’s Arguments

  • No representation appeared on behalf of the respondent (M/S Emcure Pharmaceuticals Ltd.) at the time of the oral order.
  • However, the underlying stance sustained by the respondent via the lower appellate records relied upon the binding decision of the Apex Court in M/s SRD Nutrients Pvt. Ltd., which mandated the refund of Education Cess and SHEC where the primary excise duty was exempted.

Court Order / Findings

  • The Division Bench, comprising Hon'ble the Chief Justice Ali Mohammad Magrey and Hon'ble Mr. Justice Vinod Chatterji Koul, perused the contents of the instant appeal.
  • The Bench observed that a substantial batch of similar appeals filed by the Commissioner of Central GST and Central Excise, Jammu, involving identical subject matters and grounds, had already been dismissed by a Coordinate Bench of the High Court via a lead judgment dated May 23, 2022 (in CEA No. 10/2022).
  • The Court noted that the challenges raised by the Revenue in the current appeal were on almost identical grounds to those already extensively dealt with and resolved by the Coordinate Bench in the prior judgment.
  • Invoking the doctrine of judicial discipline and the necessity to maintain judicial parity, the High Court held that the present appeal deserved the same treatment.
  • Consequently, the High Court dismissed the Revenue's appeal on the same terms and conditions as laid down in the Judgment dated May 23, 2022. All subsisting interim directions were formally vacated.

Important Clarification

  • Judicial Consistency: This judgment reiterates the strict stance of High Courts regarding judicial consistency. When a Coordinate Bench has already decided a question of law or a batch of appeals arising from identical facts (such as the refund of Education Cess based on SRD Nutrients), subsequent benches will maintain parity and dismiss identical revenue appeals on the same terms rather than re-litigating the settled position.

Section Involved

  • Section 35G of the Central Excise Act, 1944 (Appeals to the High Court).

Link to download the order -https://mytaxexpert.co.in/uploads/1783313427_908compressed.pdf

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