Facts of the Case

The Commissioner of Central GST and Central Excise, Jammu and Kashmir, Jammu filed an appeal under Section 35G of the Central Excise Act, 1994 against an order passed by the Customs, Excise and Service Tax Appellate Tribunal, Chandigarh.

The CESTAT 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 decision was based on the judgment of the Supreme Court in M/s SRD Nutrients Pvt. Ltd. vs Commissioner of Central Excise, Guwahati, reported as 2017 (335) ELT 481 (SC).

The High Court recorded that a batch of similar appeals had already been filed by the Commissioner under Section 35G against CESTAT orders granting refund of these cesses. Those appeals, together with applications seeking condonation of delay and with CEA No. 10/2022 as the lead case, had been dismissed by a Coordinate Bench through judgment dated 23 May 2022.

Issues Involved

The principal issues arising in the matter were:

  1. Whether the Revenue’s appeal under Section 35G of the Central Excise Act, 1994 against the CESTAT order directing refund of Education Cess and Secondary & Higher Education Cess could be sustained.
  2. Whether the present appeal raised grounds materially different from those already considered by the Coordinate Bench in the earlier batch of appeals decided on 23 May 2022.
  3. Whether, in view of the substantially identical controversy and grounds, judicial parity required dismissal of the present appeal on the same terms and conditions as the earlier batch.

Appellant’s Arguments

The Commissioner of Central GST and Central Excise J&K, Jammu challenged the CESTAT order under Section 35G of the Central Excise Act, 1994.

The challenge was directed against the appellate tribunal’s decision which had set aside the orders of the Commissioner (Appeals) and the Adjudicating Authority and directed refund of Education Cess and Secondary & Higher Education Cess to the assessee.

However, the High Court specifically found that the impugned order and the grounds of challenge were similar to those involved in the earlier batch of appeals already considered and decided by the Coordinate Bench.

Respondent’s Arguments

The judgment records that none appeared for the respondent. Therefore, no separate oral submissions or arguments on behalf of M/s Gaurav Agro-Chem Industries are recorded in the order. The matter was considered by the High Court on the basis of the contents of the appeal and the binding relevance of the earlier Coordinate Bench judgment.

Court Order / Findings

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

  • the challenge was directed against an order similar to those involved in the earlier batch of appeals;
  • the grounds raised were almost identical to the grounds already dealt with by the Coordinate Bench;
  • the earlier batch had been decided by judgment dated 23 May 2022; and
  • parity required the present appeal to receive the same treatment.

Accordingly, the High Court dismissed the appeal on the same terms and conditions as laid down in the Coordinate Bench judgment dated 23 May 2022. The Court further directed that any interim directions subsisting as on that date would stand vacated.

Important Clarification

The judgment is significant because the High Court did not undertake a fresh independent adjudication of the entire cess-refund controversy on merits. Instead, it found that the present appeal involved a similar order and almost identical grounds already dealt with by the Coordinate Bench in the earlier batch of appeals.

Therefore, the dismissal was expressly founded on the principle of maintaining parity and consistency with the Coordinate Bench judgment dated 23 May 2022.

It is also important to distinguish between:

  • the Supreme Court precedent in M/s SRD Nutrients Pvt. Ltd. vs Commissioner of Central Excise, Guwahati, 2017 (335) ELT 481 (SC), which was identified in the judgment as the basis on which CESTAT had directed refund; and
  • the Coordinate Bench judgment dated 23 May 2022, which constituted the immediate basis for dismissal of the present appeal on parity.

Thus, the precise ratio of this two-page order is that where the Revenue’s challenge concerned a similar CESTAT order and proceeded on almost identical grounds already dealt with in the earlier batch, the High Court dismissed the appeal on the same terms and conditions to maintain parity. The uploaded judgment records this reasoning on page 2.

Sections Involved

Section 35G of the Central Excise Act, 1994 — statutory provision under which the Commissioner filed the appeal before the High Court against the order of CESTAT.

 Link to download the order - https://mytaxexpert.co.in/uploads/1783330904_1327compressed.pdf

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