Facts of the Case

The Commissioner of Central GST and Central Excise, J&K, Jammu filed an appeal before the High Court of Jammu & Kashmir and Ladakh at Jammu under Section 35G of the Central Excise Act, 1994 against an order passed by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chandigarh.

The dispute concerned the refund of Education Cess and Secondary & Higher Education Cess to the assessee. The CESTAT had set aside the orders passed by the Commissioner (Appeals) and the Adjudicating Authority and directed refund of the cesses in view of the Supreme Court decision in M/s SRD Nutrients Pvt. Ltd. vs Commissioner of Central Excise, Guwahati, 2017 (335) ELT 481 (SC).

The High Court recorded that a batch of similar appeals filed by the Commissioner had already been dismissed by a Coordinate Bench through judgment dated 23 May 2022, with CEA No. 10/2022 treated as the lead case. The present appeal raised an almost identical challenge on substantially similar grounds.

Issues Involved

The principal issues before the High Court were:

  1. Whether the departmental appeal 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 adjudication when substantially identical appeals had already been decided by a Coordinate Bench.
  2. Whether the CESTAT’s refund direction, founded upon the Supreme Court ruling in M/s SRD Nutrients Pvt. Ltd. vs Commissioner of Central Excise, Guwahati, could be interfered with in the present appeal.
  3. Whether judicial parity required dismissal of the present appeal on the same terms and conditions as the earlier batch decided on 23 May 2022.

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 challenge was directed against the appellate tribunal’s decision setting aside the orders of the Commissioner (Appeals) and the Adjudicating Authority and allowing refund of Education Cess and Secondary & Higher Education Cess.

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 order records that none appeared for the respondent, M/s Nitin Enterprises.

Accordingly, the judgment does not set out any separate oral or written submissions advanced on behalf of the respondent. The Court proceeded to examine the contents of the appeal and compare the controversy with the earlier batch of appeals already decided by the Coordinate Bench.

Court Order / Findings

The High Court found that:

  • The present appeal challenged an order similar to those involved in the earlier batch of appeals.
  • The grounds of challenge were almost identical to those already dealt with by the Coordinate Bench.
  • The earlier batch, including applications seeking condonation of delay and with CEA No. 10/2022 as the lead case, had been dismissed by judgment dated 23 May 2022.
  • To maintain parity, the present appeal was also required to be dismissed on the same terms and conditions as laid down in the earlier judgment.

Accordingly, the High Court dismissed the appeal. It further directed that any subsisting interim directions would stand vacated. The judgment was delivered on 27 October 2022 by the Bench comprising the Chief Justice and Justice Vinod Chatterji Koul.

Important Clarification

The judgment is significant for its application of the principle of judicial parity and consistency. The High Court did not undertake a fresh detailed determination of the cess-refund controversy because an almost identical batch of departmental appeals had already been adjudicated by a Coordinate Bench.

The order expressly refers to the Supreme Court ruling in M/s SRD Nutrients Pvt. Ltd. vs Commissioner of Central Excise, Guwahati, 2017 (335) ELT 481 (SC) as the decision relied upon by the CESTAT while directing refund of Education Cess and Secondary & Higher Education Cess.

A further important clarification is that the present two-page judgment should be understood as a parity-based dismissal: the Court dismissed the appeal on the same terms and conditions as the Coordinate Bench judgment dated 23 May 2022. Therefore, the present order itself does not reproduce an extensive independent analysis of every substantive legal issue concerning the cess refund.

Sections Involved

Section 35G of the Central Excise Act, 1944 – Appeal to the High Court against eligible orders passed by the Appellate Tribunal, subject to the statutory requirements governing such appeals.

The substantive controversy related to the refund of:

  • Education Cess
  • Secondary and Higher Education Cess

 

Link to Download the Order-https://mytaxexpert.co.in/uploads/1783403305_1344compressed.pdf

 

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