Facts of the Case

The Commissioner of Central GST and Central Excise, Jammu and Kashmir, Jammu filed an appeal before the High Court under Section 35G of the Central Excise Act, 1944, challenging an order passed by the Customs, Excise and Service Tax Appellate Tribunal, Chandigarh (CESTAT).

The impugned CESTAT order 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 Tribunal’s approach was based on the decision of the Supreme Court in M/s SRD Nutrients Pvt. Ltd. v. 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 of Central GST and Central Excise, Jammu and Kashmir, under Section 35G against CESTAT orders granting such refunds. Those appeals, along with applications for condonation of delay, had already been dismissed by a Coordinate Bench through judgment dated 23 May 2022, with CEA No. 10/2022 as the lead case.

Issues Involved

The principal issues arising from the appeal were:

  1. Whether the Revenue’s challenge under Section 35G of the Central Excise Act, 1944 against the CESTAT order directing refund of Education Cess and Secondary & Higher Education Cess required separate consideration when substantially identical challenges had already been decided by a Coordinate Bench.
  2. Whether the present appeal could be distinguished from the earlier batch of appeals dismissed by the High Court on 23 May 2022.
  3. Whether, for maintaining judicial consistency and parity, the present appeal should be dismissed on the same terms and conditions as the earlier batch judgment.
  4. Whether the CESTAT order granting refund, in the context of the Supreme Court ruling in M/s SRD Nutrients Pvt. Ltd. v. Commissioner of Central Excise, Guwahati, warranted interference in the present appeal.

Appellant’s Arguments

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

The Revenue’s challenge was directed against the appellate tribunal’s decision which 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.

However, the High Court specifically observed that the grounds raised in the present appeal were almost identical to those already considered and dealt with by the Coordinate Bench in the earlier batch of appeals decided on 23 May 2022.

Respondent’s Arguments

The judgment records that none appeared for the respondent, M/s Gaurav Agro-Chem Industries.

Accordingly, no separate oral submissions on behalf of the respondent are recorded in the judgment. The Court decided the matter after examining the contents of the appeal and comparing the challenge with the earlier batch of appeals already decided by the Coordinate Bench.

Court Order / Findings

The High Court made the following material findings:

  • The present appeal challenged a similar order to those that formed the subject matter of the earlier batch of appeals.
  • The grounds raised in the present matter were almost identical to the grounds already dealt with by the Coordinate Bench.
  • The Coordinate Bench had already dismissed the earlier batch of appeals through judgment dated 23 May 2022.
  • In order to maintain parity, the High Court found it appropriate to dismiss the present appeal on the same terms and conditions as laid down in the earlier Coordinate Bench judgment.
  • Consequently, CEA No. 284/2022 was dismissed.
  • Any interim direction(s) subsisting as on the date of judgment were ordered to stand vacated.

Important Clarification

This judgment is significant because the High Court did not undertake a fresh independent adjudication of the entire refund controversy on merits. Instead, it found that the impugned order and the grounds of challenge were substantially similar to those already considered in the earlier batch of appeals.

The dismissal was expressly based on the need to maintain parity with the Coordinate Bench judgment dated 23 May 2022. Therefore, the judgment should be understood in the specific procedural and precedential context recorded by the Court.

It is also important that the judgment refers to M/s SRD Nutrients Pvt. Ltd. v. Commissioner of Central Excise, Guwahati, 2017 (335) ELT 481 (SC) as the Supreme Court decision in view of which CESTAT had directed refund of Education Cess and Secondary & Higher Education Cess. The present High Court judgment itself does not reproduce or independently re-determine the full ratio of that Supreme Court ruling.

Further, since none appeared for the respondent, the judgment does not record any separate respondent-side oral argument.

Sections / Legal Provisions Involved

Section 35G of the Central Excise Act, 1944 – Provision governing appeals to the High Court from qualifying orders of the Appellate Tribunal, subject to the statutory requirements governing such appeals.

Education Cess and Secondary & Higher Education Cess – The substantive refund dispute concerned entitlement to refund of these cesses in the factual and legal context of the CESTAT order challenged by the Revenue.

Link to download the order - https://mytaxexpert.co.in/uploads/1783330721_1326compressed.pdf

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