TMI Blog2021 (10) TMI 484X X X X Extracts X X X X X X X X Extracts X X X X ..... erroneous refund would also be a refund which has been made by an order which is without jurisdiction. All the same, such is not the case here in the present matters. To summarize the basic argument of the respondents would be that irrespective of the fact that M/s SRD Nutrients Private Limited [ 2017 (11) TMI 655 - SUPREME COURT] has been declared as per incuriam, the matter has attained finality between the parties, inasmuch as, the order passed by the Revenue for refund of the amount has not been challenged, nor has the order of the learned Single Judge, by which the learned Single Judge has directed that in view of the M/s SRD Nutrients Private Limited the amount should be refunded, been taken in writ appeal before this High Court. The matter having attained finality, it cannot be now opened at this stage even though M/s SRD Nutrients Private Limited has been declared as per incuriam, in the case of M/s Unicorn Industries. We agree with the submissions of the learned counsels for the assessees/petitioners that, under the facts and circumstances of the case, the amount refunded to them cannot be recovered, as it was not refunded to them erroneously, but it was returned to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ozone Pharmaceuticals Ltd., M/s. Kamlang Saw And Veneer Mills Pvt. Ltd., M/s. New Age Petcoke Pvt. Ltd. Assam Roofing Limited, M/s. JSVM Plywood Industries Ltd. (Formerly Known As M/S Arunachal Saw and Venner Mills Pvt. Ltd.), M/s. Gattani Polymers, M/s. Jumbo Roofing And Tiles, M/s. Ahinsha Chemicals Ltd., Kamakhya Plastics Pvt. Ltd., Modi Mundipharma Beauty Products Pvt. Ltd. (Formerly Known As Kamakhya Cosmetics And Pharmaceuticals Ltd.), M/s. Barak Valley Cements Ltd., Cent Ply (A Division Of Century Plyboards (I) Ltd.), M/s. Barak Ispat Pvt. Ltd., M/s. K.D Iron And Steel Co., Cement International Ltd., M/s. PCL Cement And Pipe Industries, Upper Assam Petrocoke Pvt. Ltd, M/s. River Valley Corporation JUDGMENT ORDER (Sudhanshu Dhulia, CJ) All these writ appeals have been filed by the Union of India challenging the common judgment order of the learned Single Judge dated 12.03.2021 passed in a bunch of writ petitions [WP(C) No.2929/2020 being the leading case], wherein the learned Single Judge has allowed the petitions and had quashed the show cause notices given to each of the petitioners by the Central Excise Department. These show cause notices were given to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tries in the North-East in the shape of income tax as well as excise duty, for a period of ten years. Certain industries which were in the Negative list were not covered under this Notification. For any purposes, since we are only concerned with the exemption of excise duty, the relevant portion of the Notification dated 01.04.2007, reads as under:- OFFICE MEMORANDUM Sub: North East Industrial and Investment Promotion Policy (NEIIPP), 2007 The Government has approved a package of fiscal incentives and other concessions for the North East Region namely the North East Industrial and Investment Promotion Policy (NEIIPP), 2007 , effective from 1.4.2007, which, inter-alia, envisages the following : (i) ***** (ii) ***** (iii) ***** (iv) ***** (v) Excise Duty Exemption: 100% Excise Duty exemption will be continued, on finished products made in the North Eastern Region, as was available under NEIP, 1997. However, in cases, where the CENVAT paid on the raw materials and intermediate products going into production of finished products (other than the products which are otherwise exempt or subject to nil rate of duty) is higher than the exci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation Cess levied under sub-section (11) of section 2 and this Chapter for the purposes specified in subsection (1), as it may consider necessary. 92. Definition. The words and expressions used in this Chapter and defined in the Central Excise Act, 1944 (1 of 1944), the Customs Act, 1962 (52 of 1962) or Chapter V of the Finance Act, 1994 (32 of 1994), shall have the meanings respectively assigned to them in those Acts or Chapter, as the case may be. 93. Education Cess on excisable goods. (1) The Education Cess levied under section 91, in the case of goods specified in the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), being goods manufactured or produced, shall be a duty of excise (in this section referred to as the Education Cess on excisable goods), at the rate of two per cent, calculated on the aggregate of all duties of excise (including special duty of excise or any other duty of excise but excluding Education Cess on excisable goods) which are levied and collected by the Central Government in the Ministry of Finance (Department of Revenue), under the provisions of the Central Excise Act, 1944 (1 of 1944) or under any other law for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay excise duty have to shell out education cess as well. This education cess is introduced by Sections 91 to 93 of the Finance (No. 2) Act, 2004. As per Section 91 thereof, education cess is the surcharge which the assessee is to pay. Section 93 makes it clear that this education cess is payable on excisable goods i.e. in respect of goods specified in the First Schedule to the Central Excise Tariff Act, 1985. Further, this education cess is to be levied @ 2% and calculated on the aggregate of all duties of excise which are levied and collected by the Central Government under the provisions of the Central Excise Act, 1944 or under any other law for the time being in force. Sub-section (3) of Section 93 provides that the provisions of the Central Excise Act, 1944 and the Rules made thereunder, including those related to refunds and duties, etc. shall as far as may be applied in relation to levy and collection of education cess on excisable goods. A conjoint reading of these provisions would amply demonstrate that education cess as a surcharge, is levied @ 2% on the duties of excise which are payable under the Act. It can, therefore, be clearly inferred that when there is no excise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C 801 : 2019 SCC OnLine SC 421] are clearly per incuriam. The decisions in Modi Rubber Ltd. [Union of India v. Modi Rubber Ltd., (1986) 4 SCC 66 : 1986 SCC (Tax) 781] and Rita Textiles (P) Ltd. [Rita Textiles (P) Ltd. v. Union of India, 1986 Supp SCC 557 : 1987 SCC (Tax) 87] are binding on us being of coordinate Bench, and we respectfully follow them. We did not find any ground to take a different view. (Emphasis provided) 14. After the aforesaid decision of the Hon ble Apex Court in M/s Unicorn Industries, the Revenue initiated the present exercise of giving notice to the petitioners/ manufacturers under Section 11A(1) of the Central Excise Act, 1944, to re-deposit the Education Cess and Higher Education Cess which were earlier erroneously refunded. Section 11A(1) of the Central Excise Act reads as under: Section 11A. Recovery of duties not levied or not paid or short-levied or short-paid or erroneously refunded. (1) Where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, for any reason, other than the reason of fraud or collusion or any willful mis-statement or suppression of facts or contraventio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioners were made by the Central Excise Department in terms of the judgment rendered by the Apex Court in SRD Nutrients which was the law prevailing at the relevant point in time. The said judgment being held to be per incuriam by later judgment will not alter the binding effect of SRD Nutrients under which the refunds were already granted to the petitioners. Accordingly the refunds granted cannot be said to be erroneous as have been sought to be projected by the Department by issuing the impugned Demand-cum-show cause notices. 16. The argument raised before the learned Single Judge by the petitioners was that the conditions which was necessary for exercise of power under Section 11A(i) of the Act were not present in the case as there was no fraud , collusion or wilful misrepresentation given to the revenue by the petitioners. The ground on which the refund was made was a judgment of the Hon ble Apex Court given in the case of M/s SRD Nutrients Private Limited, which was good law at the time when such a refund was made and merely because it has been held to be per incuriam, the amount already refunded is not liable to be returned and it cannot be said that the refund was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed a review petition in M/s SRD Nutrients Private Limited, which was dismissed on 10.07.2018. Thereafter, another petition was filed before the Hon ble Apex Court and the Apex Court has vide order dated 27.09.2021 referred the matter to a larger Bench and, therefore, in view of this fact, learned counsel for the appellants has prayed that these matters be adjourned till the case is decided by the larger Bench of the Hon ble Apex Court. 20. Dr. A. Saraf, learned senior counsel, appearing for the respondents, on the other hand, has objected to the above request of Mr. Keyal and he would argue that M/s SRD Nutrients Private Limited has been declared as per incuriam in a later decision of the Hon ble Apex Court and that is the admitted position. All this Court has to now decide is the rights and liabilities of the petitioners when M/s SRD Nutrients Private Limited has been declared as per incuriam. Merely because M/s SRD Nutrients Private Limited has now been referred to a larger Bench should not stop this Court from hearing these matters and, in any case, all the parties will ultimately be bound by the decision taken by the larger Bench of the Hon ble Apex Court. In view of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Consequently, the refund made to the petitioners was made erroneously and since the Revenue has the power to take back the amount refunded erroneously , as these powers are conferred under Section 11A of the Central Excise Act, the same have been exercised and the amount is being now recovered. 23. Rebutting this argument of the learned counsel for the appellant, learned senior counsel for some of the assesses/petitioners, Dr. A. Saraf would argue that it is an admitted position that the amount which was refunded to the petitioners was refunded in view of the findings of the Hon ble Apex Court in M/s SRD Nutrients Private Limited. After two years of the said judgment, another judgment, i.e. M/s Unicorn Industries, a three Judges Bench of the Hon ble Apex Court has held M/s SRD Nutrients Private Limited per incuriam. Merely because M/s SRD Nutrients Private Limited has now been declared as per incuriam by the larger Bench of the Hon ble Supreme Court, it would not undo everything which had been done between the Revenue Department and the petitioners subsequent to the decision in M/s SRD Nutrients Private Limited, when the said judgment was holding the field. The learned couns ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the net result when an earlier judgment is declared as per incuriam. Giving a reference to the case of A.R. Antulay -Vs- R.S. Nayak (1988) 2 SCC 602, the Hon ble Apex Court had held that when a previous decision is so overruled it does not happen nor has the overruling Bench any jurisdiction so to do that the finality of the operative order, inter partes, in the previous decision is overturned . Again it was emphasized that all that would happen is when the earlier judgment is declared as per incuriam, it still loses its precedential value and it is not a good law any more. 26. The third judgment being cited by the learned counsel for the petitioner is Commissioner of Income Tax, Bhopal -Vs- G.M. Mittal Stainless Steel (P) Limited (2003) 11 SCC 441. In the said case, the Commissioner of Income Tax had passed a particular order relying upon a decision of the High Court which was operating at the relevant point of time. It was held that an assessment was done by the officer based on the judgment of the High Court. In another case where a different view has been taken by the Hon ble Apex Court, it cannot be said that at the time when the order was passed by the Incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty. All that is stated on behalf of the counsel representing the State of Haryana is that the appellate authority had based its decision on the decision of the Tribunal in M/s. Liberty Footwear Co., Kamal, which decision could not be held to be laying down the correct law in view of the later decision rendered by the Tribunal in M/s. Steel Kraft, Panipat. We do not find any merit in the contention of the learned counsel as on the day when the appellate authority decided the appeals preferred by Free Wheels (India) Ltd., the decision rendered by the Tribunal in M/s. Liberty Footwear Co., had the field. If on a subsequent decision the Tribunal has taken a contrary view it would not make the proceedings that have been finalised far earlier and are based upon an earlier decision of the Tribunal either Illegal or improper. If the contention of the learned state counsel is upheld. It would result into endless litigation as all matter finalised earlier on the basis of law then in existence and holding the field would need reconsideration if law changes in succeeding years. All matters that have been finalised shall be then reported thus, unsettling the settled matters, in any case, as men ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h judgment of this High Court in Mahavir Coke Industries case was on the basis of the then existing law i.e., 1992 (2) SCC 683 and could not be said to be wrong just because later on that view was upset in 1995 (1) SCC 58 . We agree with the learned counsel that law laid down in Tax matters should normally be applied prospectively. No tax was collected by the appellant from the purchasers as per the law then existing. 28. Dr. Saraf, learned senior counsel would argue that the power under Section 11A of the Central Excise Act for recovery of the amount erroneously paid can only be done if the amount has been paid erroneously. But it cannot be said by any stretch of imagination that when the amount of education cess or higher education cess was refunded to the writ petitioners, it was done erroneously, rather it was done in accordance with law and in compliance of the judgment of the Apex Court which is a law under Article 142 of the Constitution of India and has to be followed by every Court in the country. 29. What amounts to be paid erroneously has been explained by another Division Bench of this Court in the case of Rajendra Singh -Vs- Superintendent of Taxes Ors. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g character of judgments, of Courts of competent jurisdiction, is in essence a part of the rule of law on which administration of justice is founded. ( The Direct Recruit Class- II Engineering Officers' Association and others vs. State of Maharashtra and others; U.P. State Road Transport Corporation vs. State of U.P. and Anr .). Once a matter, which was the subject-matter of a lis, stood determined by a competent Court, no party can thereafter be permitted to reopen it in a subsequent litigation. ( Swamy Atmananda and Ors. vs. Sri Ramakrishna Tapovanam and Ors.; Ishwar Dutt vs. Land Acquisition Collector and Anr .). 24. A decision, which has attained finality, is binding between the parties, and they are not to be permitted to reopen the issue decided thereby. ( Supreme Court Employees Welfare Association Vs. Union of India ). Such orders bind the parties in a subsequent litigation or before the same Court at a subsequent stage of proceedings. ( Barkat Ali v. Badrinarain ). An order of a Court/Tribunal of competent jurisdiction, directly upon a point, creates a bar, as regards a plea, between the same parties in some other matter in another Court/Tribunal where the said pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el who appears for the respondents in W.A. No. 170/2021, W.A. No. 201/2021 and W.A. No. 213/2021 , though has adopted the arguments of Dr. Saraf, would also argue that the decision in M/s SRD Nutrients Private Limited is binding between the parties and until the said judgment is set aside, even the show cause notice which has been given to the respondents by the Revenue is without jurisdiction. 33. To summarize the basic argument of the respondents would be that irrespective of the fact that M/s SRD Nutrients Private Limited has been declared as per incuriam, the matter has attained finality between the parties, inasmuch as, the order passed by the Revenue for refund of the amount has not been challenged, nor has the order of the learned Single Judge, by which the learned Single Judge has directed that in view of the M/s SRD Nutrients Private Limited the amount should be refunded, been taken in writ appeal before this High Court. The matter having attained finality, it cannot be now opened at this stage even though M/s SRD Nutrients Private Limited has been declared as per incuriam, in the case of M/s Unicorn Industries. 34. We agree with the submissions of the learned couns ..... X X X X Extracts X X X X X X X X Extracts X X X X
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