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, 1944 against an order of the Customs, Excise and Service Tax Appellate Tribunal, Chandigarh (CESTAT). The Tribunal 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 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 under Section 35G, together with applications seeking condonation of delay and led by CEA No. 10/2022, 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 Revenue’s challenge against the CESTAT order directing refund of Education Cess and Secondary & Higher Education Cess could be sustained under Section 35G of the Central Excise Act, 1944.
  2. Whether the controversy was governed by the Supreme Court decision in M/s SRD Nutrients Pvt. Ltd. vs Commissioner of Central Excise, Guwahati, 2017 (335) ELT 481 (SC).
  3. Whether the present appeal, involving a similar order and almost identical grounds, should be decided consistently with the Coordinate Bench judgment dated 23 May 2022 rendered in the earlier batch of appeals.

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, 1944. The challenge concerned the Tribunal’s interference with the orders of the Commissioner (Appeals) and the Adjudicating Authority and its direction granting refund of Education Cess and Secondary & Higher Education Cess to the assessee.

The Revenue’s appeal was founded on grounds that the High Court found to be almost identical to those already considered and dealt with by the Coordinate Bench in the earlier batch of appeals decided on 23 May 2022. The short judgment does not separately reproduce detailed ground-wise submissions of the appellant; therefore, no additional argument beyond the recorded challenge should be attributed to the Revenue.

Respondent’s Arguments

The respondent, M/s Cadila Pharmaceuticals Ltd., was represented by Senior Advocate Mr Pranav Kohli along with Advocate Mr Farhan Mirza. The underlying position supporting the respondent was that the CESTAT had directed refund of Education Cess and Secondary & Higher Education Cess in view of the Supreme Court ruling in M/s SRD Nutrients Pvt. Ltd. vs Commissioner of Central Excise, Guwahati.

The judgment does not record separate detailed oral submissions advanced on behalf of the respondent. Accordingly, the respondent’s case is confined to the position evident from the impugned CESTAT order and the precedent expressly referred to by the High Court.

Court Order / Findings

The High Court examined the contents of the appeal and found that the challenge was directed against a similar order to those involved in the earlier batch of appeals. The Court further observed that the grounds raised were almost identical and had already been dealt with by the Coordinate Bench in its judgment dated 23 May 2022.

To maintain parity, 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 also ordered that any interim directions subsisting as on the date of judgment would stand vacated.

Important Clarification

The High Court did not undertake an independent detailed reconsideration of the entire controversy concerning refund of Education Cess and Secondary & Higher Education Cess. Instead, the decisive basis of dismissal was that:

  • the impugned order was similar to those involved in the earlier batch of appeals;
  • the grounds of challenge were almost identical;
  • those grounds had already been dealt with by the Coordinate Bench; and
  • parity required dismissal on the same terms and conditions as the judgment dated 23 May 2022.

Therefore, the judgment should be understood as a parity-based disposal following the earlier Coordinate Bench ruling, rather than as a fresh exhaustive determination of every substantive issue concerning cess refund.

Section Involved

Section 35G of the Central Excise Act, 1944 – The provision under which the Commissioner filed the appeal before the High Court against the CESTAT order.

Link to Download the Order-https://mytaxexpert.co.in/uploads/1783403747_1346compressed.pdf

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