Facts of the Case

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

The dispute formed part of a broader category of cases in which CESTAT had set aside orders passed by the Commissioner (Appeals) and the Adjudicating Authority and had directed refund of Education Cess and Secondary & Higher Education Cess to assessees in view of the decision 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 filed by the Commissioner, together with applications seeking condonation of delay and with CEA No. 10/2022 as the lead case, had already been dismissed by a Coordinate Bench through judgment dated 23 May 2022.

Issues Involved

The principal issues arising from the appeal were:

  1. Whether the order of CESTAT directing refund of Education Cess and Secondary & Higher Education Cess to the assessee could be interfered with in an appeal filed under Section 35G of the Central Excise Act, 1994.
  2. Whether the Revenue’s challenge raised grounds materially different from those already considered and decided by the Coordinate Bench in the earlier batch of appeals.
  3. Whether, where the present appeal involved a similar order and almost identical grounds, the High Court should maintain judicial parity by following its earlier judgment dated 23 May 2022.
  4. Whether the Revenue appeal could survive when the same category of challenge had already been dealt with by the Coordinate Bench.

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 appeal was directed against an order similar to those challenged in the earlier batch of appeals, where CESTAT 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.

The High Court specifically observed that the instant appeal was founded on almost identical grounds to those already dealt with by the Coordinate Bench in its judgment dated 23 May 2022.

Respondent’s Arguments

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

Accordingly, the Court’s determination proceeded after examining the contents of the appeal and comparing the controversy and grounds with the earlier batch of appeals already decided by the Coordinate Bench. The absence of representation for the respondent did not prevent the Court from deciding the matter on the basis of the existing judicial precedent governing substantially identical challenges.

Court Order / Findings

The High Court dismissed the Revenue’s appeal.

The Court found that:

  • the present appeal challenged a similar order to those involved in the earlier batch of appeals;
  • the grounds raised were almost identical to the grounds already considered by the Coordinate Bench;
  • those grounds had already been dealt with in the judgment dated 23 May 2022; and
  • in order to maintain parity, the present appeal was required to be dismissed on the same terms and conditions as laid down in that earlier judgment.

The Court further directed that any interim directions subsisting as on the date of judgment would stand vacated.

Important Clarification

The judgment is significant for its application of judicial parity and consistency. The High Court did not undertake a fresh independent adjudication of the refund controversy in detail. Instead, it expressly noted that the challenged order was similar and that the grounds were almost identical to those already dealt with by a Coordinate Bench.

Therefore, the appeal was dismissed on the same terms and conditions as the judgment dated 23 May 2022.

A further important clarification is that the judgment referred to the Supreme Court decision in M/s SRD Nutrients Pvt. Ltd. vs Commissioner of Central Excise, Guwahati, 2017 (335) ELT 481 (SC) as the decision in view of which CESTAT had directed refund of Education Cess and Secondary & Higher Education Cess. The High Court’s operative reasoning in the present two-page judgment, however, was specifically based on similarity with the earlier batch of appeals and the need to maintain parity.

Sections / Legal Provisions Involved

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

The substantive controversy concerned the refund of Education Cess and Secondary & Higher Education Cess, while the present High Court appeal was expressly instituted under Section 35G.

 Link to download the order - https://mytaxexpert.co.in/uploads/1783331068_1328compressed.pdf

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