9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2025 (5) TMI 61 - AT - Central ExciseApplicability of Doctrine of merger - demand of duty interest and penalty under the Central Excise Act 1944 - HELD THAT - Insofar as the prayer to set aside the order in original dated 28.1.2022 passed by the Joint Commissioner is concerned it is found that as per the doctrine of merger the order of the Joint Commissioner merged with the order in appeal dated 17.8.2023 passed by the Commissioner (Appeals) and therefore it does not exist at all. Secondly it is found that an appeal against the order of the Joint Commissioner lies to the Commissioner (Appeals) and not before this CESTAT. The Commissioner (Appeals) had already set aside the Order dated 28.1.2022 passed by the Joint Commissioner and remanded the matter to the Joint Commissioner. Insofar as the prayer to set aside the Order-in-Appeal of the Commissioner (Appeals) is concerned it is found that since an order dated 12.11.2024 has since been passed by the Additional Commissioner in pursuance of the impugned order dated 17.8.2023 this appeal has become infructuous. If the appellant is aggrieved by the order dated 12.11.2024 it can seek remedy as per the law. Appeal dismissed.
1. ISSUES PRESENTED and CONSIDERED
The core legal questions considered by the Tribunal in these appeals are: (a) Whether the Order-in-Original dated 28.1.2022 passed by the Joint Commissioner confirming demand of duty, interest, and penalty under the Central Excise Act, 1944, and appropriating the amount deposited by the appellant, can be set aside or requires reconsideration. (b) Whether the Order-in-Appeal dated 17.8.2023 passed by the Commissioner (Appeals), which set aside the original order and remanded the matter to the adjudicating authority with directions to verify vehicle details from the Regional Transport Authority, is sustainable or requires modification. (c) Whether the remand ordered by the Commissioner (Appeals) was limited and if such limitation was erroneous, potentially depriving the appellant of remedy on other issues raised. (d) Whether the Order-in-Appeal dated 5.11.2020 by the Commissioner (Appeals), rejecting the refund claim of Rs. 75,00,000/- deposited by the appellant during investigation, was justified, especially considering the pending adjudication of the Show Cause Notice dated 30.6.2020. (e) The legal effect and consequences of the doctrine of merger in relation to the original order and the appeal order. (f) The appropriate remedy available to the appellant if aggrieved by subsequent orders passed after remand. 2. ISSUE-WISE DETAILED ANALYSIS Issue (a) and (b): Validity of the Order-in-Original dated 28.1.2022 and the Order-in-Appeal dated 17.8.2023 remanding the matter Relevant Legal Framework and Precedents: The Central Excise Act, 1944, particularly sections 11A(4) (duty demand), 11AA (interest), and 11AC (penalty), govern the imposition and recovery of excise duty. Appeals against orders of the Joint Commissioner lie to the Commissioner (Appeals). The doctrine of merger is a well-established principle whereby the order appealed against merges with the appellate order once the latter is passed. Court's Interpretation and Reasoning: The Tribunal noted that the Commissioner (Appeals) had set aside the Joint Commissioner's order and remanded the matter for further verification of vehicle details from the Regional Transport Authority. The Tribunal emphasized that, as per the doctrine of merger, the original order dated 28.1.2022 ceased to exist once the appeal order was passed, and thus could not be independently assailed before the Tribunal. Key Evidence and Findings: The Commissioner (Appeals) remanded the matter with a limited direction to verify vehicle details, which was challenged by the appellant as insufficient, arguing that all issues raised should have been considered. Application of Law to Facts: The Tribunal held that the appeal against the original order lies only to the Commissioner (Appeals), and since the Commissioner (Appeals) had already remanded the matter, the original order was subsumed. Further, since a denovo adjudication order dated 12.11.2024 was passed by the Additional Commissioner pursuant to the remand, the appeal against the Commissioner (Appeals) order became infructuous. Treatment of Competing Arguments: The appellant contended that the limited remand deprived it of remedy on other issues. The Tribunal responded that the appellant could raise all issues in any subsequent appeal against the denovo order passed by the Additional Commissioner, ensuring no issue is left unaddressed. Conclusions: The Tribunal dismissed the appeal challenging the original and appeal orders as infructuous, confirming that the matter had been remanded and adjudicated afresh. Issue (c): Whether the limited remand was erroneous and deprived the appellant of remedy Relevant Legal Framework and Precedents: The Commissioner (Appeals) has the discretion to remand matters for specific purposes, but the principle of natural justice and fair adjudication requires that all relevant issues be considered. Court's Interpretation and Reasoning: The Tribunal acknowledged the appellant's submission that the limited remand was insufficient. However, it observed that since the Additional Commissioner had passed a denovo adjudication order, the appellant was free to raise all issues in a fresh appeal before the Commissioner (Appeals). Key Evidence and Findings: The Additional Commissioner's order reiterated and reconfirmed the original order except for penalty on one individual, effectively concluding the matter on merits. Application of Law to Facts: The Tribunal found that the appellant was not left without remedy, as it could file an appeal against the denovo order and have all issues considered afresh. Treatment of Competing Arguments: The Tribunal balanced the appellant's concerns with procedural propriety, ensuring that the appellant's rights to appeal and raise issues were preserved. Conclusions: The limited remand did not prejudice the appellant's rights as subsequent remedies remained available. Issue (d): Legitimacy of rejection of refund of Rs. 75,00,000/- deposited during investigation Relevant Legal Framework and Precedents: Refund claims during ongoing investigations or adjudications are subject to the outcome of the final adjudication. The refund is not automatic if the amount is appropriated towards confirmed duty, interest, or penalty after adjudication. Court's Interpretation and Reasoning: The Commissioner (Appeals) had remanded the refund claim for decision after adjudication of the Show Cause Notice dated 30.6.2020. Subsequently, the adjudicating authority confirmed the demand and appropriated the deposited amount towards duty, interest, and penalty. Key Evidence and Findings: The Additional Commissioner's order dated 12.11.2024 confirmed the appropriation of the entire deposited amount, leaving no balance for refund. Application of Law to Facts: The Tribunal held that since the amount was appropriated towards confirmed liability, the refund claim was rightly rejected. Treatment of Competing Arguments: The appellant's argument for refund was effectively negated by the final adjudication confirming duty demand and appropriation. Conclusions: The refund claim was properly rejected as the amount was utilized to satisfy confirmed liabilities. Issue (e): Effect of the doctrine of merger on the orders under challenge Relevant Legal Framework and Precedents: The doctrine of merger provides that once an appellate order is passed, the original order merges into it and ceases to have an independent existence. Court's Interpretation and Reasoning: The Tribunal applied this doctrine to hold that the original order passed by the Joint Commissioner merged into the appeal order passed by the Commissioner (Appeals) and therefore could not be independently challenged before the Tribunal. Key Evidence and Findings: The appeal against the original order was therefore not maintainable before the Tribunal. Application of Law to Facts: The Tribunal dismissed the prayer to set aside the original order on this ground. Conclusions: The doctrine of merger precluded separate challenge to the original order once the appeal order was passed. Issue (f): Appropriate remedy available to the appellant against subsequent orders Relevant Legal Framework and Precedents: Appeals against orders of the Additional Commissioner lie to the Commissioner (Appeals), who is duty-bound to consider all issues raised by the appellant. Court's Interpretation and Reasoning: The Tribunal clarified that the appellant could file an appeal against the denovo order dated 12.11.2024, and the Commissioner (Appeals) must consider all issues raised, whether or not they were part of the denovo adjudication. Key Evidence and Findings: This ensures the appellant is not left remedyless and preserves the right to challenge any adverse findings. Application of Law to Facts: The Tribunal emphasized the availability of subsequent remedies to the appellant. Conclusions: The appellant retains full opportunity to seek redressal through proper appellate channels. 3. SIGNIFICANT HOLDINGS "Insofar as the prayer to set aside the order in original dated 28.1.2022 passed by the Joint Commissioner is concerned, we find that as per the doctrine of merger, the order of the Joint Commissioner merged with the order in appeal dated 17.8.2023 passed by the Commissioner (Appeals) and, therefore, it does not exist at all." "Since an order dated 12.11.2024 has since been passed by the Additional Commissioner in pursuance of the impugned order dated 17.8.2023, this appeal has become infructuous. If the appellant is aggrieved by the order dated 12.11.2024, it can seek remedy as per the law." "If the appellant files an appeal, the Commissioner (Appeals) shall consider all issues which may be raised by the appellant whether or not they were part of de novo adjudication order. This will ensure that the appellant is not left remedyless with respect to any issues which he may like to raise." "The entire amount of Rs. 75,00,000/- deposited by the appellant stands appropriated towards the confirmed duty, interest and penalty. Therefore, nothing remains to be refunded as of today." Core principles established include the application of the doctrine of merger to excise adjudication and appeal orders, the preservation of appellant's rights to raise all issues in subsequent appeals notwithstanding limited remand, and the finality of appropriation of deposited amounts towards confirmed liabilities precluding refund. Final determinations were:
|
