9911796707
TMI Blog2025 (5) TMI 638X X X X Extracts X X X X X X X X Extracts X X X X ..... nbsp; 2. The brief facts are that the appellant is a manufacturer of parts and accessories of motor vehicles falling under Chapter 87 of the Schedule to the Central Excise Tariff Act, 1985. In the course of its business, the appellant used to avail cenvat credit of the taxes/ duty paid on various inputs/capital goods and input services used for manufacturing of dutiable finished goods cleared on payment of applicable excise duty as per the Act. 3. With effect from 31.01.2015, the appellant stopped its manufacturing activities and all the manufactured goods have been cleared on payment of applicable central excise duty. On 01.05.2015 the appellant submitted an online application for surrender of central excise registration. At the time of closure of the business/ manufacturing operations the appellant had unutilized accumulated cenvat credit balance of Rs 18,74,68,939/- which was availed on inputs, input services and capital goods. 4. Consequent to such closure, since there is no output excise duty liability and there was no possibility to set off of the duty/taxes suffered on goods/services the appellant was of the view that it is eligible to claim refund of the unutilized acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tput excise duty liability, the appellant is eligible to claim refund of the unutilized accumulated cenvat credit on closure of manufacturing operations and thus had filed refund application under Section 11(B) of the Act. c) There is no express provision for denial of refund of accumulated cenvat credit on closure of manufacturing operations under the Act and rules made thereunder and the CCR d) It is specified under Section 11B that refund shall be granted to the assessee/applicant only under the cases covered under proviso to sub-section (2) e) The refund claim filed by the appellant is covered in clause (c) as well as clause (d) of proviso to Section 11B(2) as referred above f) That the said amount of credit has been shown as balances in their financial statement under the current assets head and accordingly their refund claim is free from unjust enrichment i.e. the Appellant itself has borne the burden and has not passed on to any other person and in this regard the appellant is submitting a copy of CA certificate evidencing the absence of unjust enrichment. 7. After due process of law, the adjudicating authority vide impugned Order-in-Original No. 258/2015 (R) d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e circumstance of closure of the factory the appellant is not in position to utilize the cenvat credit in absence of any output duty liability and therefore rejection of cash refund of accumulated cenvat credit will amount to denial of the benefit accrued to the appellant under law. viii. without prejudice, the refund claim may also be covered under clause (d) of proviso to section 11B(2) as the appellant has not passed on the burden of duty paid on the inputs, input services and capital goods to any other person/entity/customers. ix. the appellant is enclosing a CA certificate that shows that the burden is not passed on to any other person. x. cash refund of accumulated credit is not restricted only to final products cleared for export under Rule 5 of the CCR and the said Rule does not expressly prohibit refund of unutilized credit where there is no manufacture in the light of closure of factory. Reliance is placed on the decisions in Slovak India Trading Co Ltd v CCE, Bangalore, 2006 (205) ELT 956 (Tri-Bang) which was approved by the Hon'ble High Court of Karnataka in Union of India v. Slovak India Trading Co. Pvt Ltd, 2006 (201) ELT 559 (Kar) which was maintained by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ra 9 and 13 (1) of paper book-OIA). ii. The appellant relies on the following judicial precedents of the High Courts where it has been held that the refund would be eligible in the absence of any specific provisions restricting the refund charm on account of closure of business and submits that the same are binding in nature. a. Union of India Versus Slovak India Trading Co. Pvt. Ltd. [2006 (7) TMI 9 - KARNATAKA HIGH COURT] b. Union of India Vs. Slovak India Trading Co. Pvt. Ltd. [2007 (1) TMI 556 SC ORDER] c. The Commissioner, Goods and Service Tax Commissionerate Vs M/S Shree Krishna Paper Mills and Industries Ltd. And Ors. [2019 (12) TMI 1348 PUNJAB AND HARYANA HIGH COURT] d. M/s. Lav Kush Textiles Vs. The Commissioner, Central Excise, Jaipur (2017 (5) TMI 1021 RAJASTHAN HIGH COURT) e. M/s. Welcure Drugs and Pharmaceuticals Ltd. Vs. Commissioner of Central Excise, Jaipur (2018 (8) TMI 1169 RAJASTHAN HIGH COURT) iii) That the Hon'ble CESTAT Chennai has been consistently following the decision of Slovak India Trading (supra) and granting refund under identical circumstances. Reliance in this regard is place on the following judgments: a M/s. Castro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... artment. While reiterating the findings of the Ld. appellate authority, he submitted that the appellate authority has rightly upheld the order of the adjudicating authority which is well reasoned and contended as under: i. The claim of the appellant under proviso to Section 11B(2) cannot sustain as the clause (c) under the proviso deals with refund related to refund of input credit earned by the manufacturer in accordance with the rules made or any notification issued under the Act and the appellant has not stated any such notification or rule in its refund claim ii. That the appellant has not filed the refund claim under Rule 5 of the CCR or followed conditions prescribed under Notfn. No.27/2012 -CE (NT) dated 18-06-2012 issued under this rule. iii. That it is not the case of the appellant that the accumulation of impugned credit is due to use of the impugned inputs/input services in the manufacture of the final products exported without payment of duty under bond and neither Rule 5 nor the notification issued thereunder envisage grant of refund of unutilized cenvat credit at the time of closure of the factory. iv. That in the absence of any explicit provision in the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered the Bombay High Court decision in Gauri Plasticulture, but the third member has observed that the judgment of the Hon'ble Supreme Court in the case of Gangadhara Palo was not placed by the counsel from either side before the Hon'ble Bombay High Court, while deciding the appeal in the case of Gauri Plasticulture and therefore the ratio of the judgement of Hon'ble Apex Court supra was not considered by the Hon'ble High Court and therefore it cannot be conclusively said that the decision of the Hon'ble Karnataka High Court in the case of Slovak India Trading Co Pvt ltd lacks value as a precedent. It was also submitted by the Ld. Counsel that the Tribunal in its decision in Larsen & Toubro Ltd v CST, Delhi has held that wherever pursuant to a conflict of opinion in a decision by a Division Bench, the conflict is referred to a third member of the Tribunal for resolution, the resultant judgement must be considered as if it were a judgement of a large Bench (three member) sitting en banc. That this Tribunal is therefore bound by judicial discipline to adhere to the decision in the ATV case as it has the effect of a Tribunal Larger Bench decision. The Ld. Counsel has also relied on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before the expiry of one year from the relevant date in such form and manner as may be prescribed and the application shall be accompanied by such documentary or other evidence including the documents referred to in section 12A as the applicant may furnish to establish that the amount of duty of excise and interest, if any, paid on such duty in relation to which such refund is claimed was collected from, or paid by, him and the incidence of such duty and interest, if any, paid on such duty had not been passed on by him to any other person : Provided that where an application for refund has been made before the commencement of the Central Excises and Customs Laws (Amendment) Act, 1991, such application shall be deemed to have been made under this sub-section as amended by the said Act and the same shall be dealt with in accordance with the provisions of sub-section (2) substituted by that Act: Provided further that the limitation of one year shall not apply where any duty and interest, if any, paid on such duty has been paid under protest. [ * * * * ] (2) If, on receipt of any such application, the Assistant Commissioner of Central Excise or Deputy Commissioner of Centra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if it is sitting, as soon as may be after the issue of the notification, and, if it is not sitting, within seven days of its re-assembly, and the Central Government shall seek the approval of Parliament to the notification by a resolution moved within a period of fifteen days beginning with the day on which the notification is so laid before the House of the People and if Parliament makes any modification in the notification or directs that the notification should cease to have effect, the notification shall thereafter have effect only in such modified form or be of no effect, as the case may be, but without prejudice to the validity of anything previously done thereunder. (5) For the removal of doubts, it is hereby declared that any notification issued under clause (f) of the first proviso to sub-section (2), including any such notification approved or modified under sub-section (4), may be rescinded by the Central Government at any time by notification in the Official Gazette. [Explanation. - For the purposes of this section, - (A) "refund" includes rebate of duty of excise on excisable goods exported out of India or on excisable materials used in the manufacture of good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yer. - Every person who has paid the duty of excise on any goods under this Act shall, unless the contrary is proved by him, be deemed to have passed on the full incidence of such duty to the buyer of such goods. III. SECTION 12C. Consumer Welfare Fund. - (1) There shall be established by the Central Government a fund, to be called the Consumer Welfare Fund. (2) There shall be credited to the Fund, in such manner as may be prescribed, - (a) the amount of duty of excise referred to in sub-section (2) of section 11B or sub-section (2) of section 11C or sub-section (2) of section 11D; (b) the amount of duty of customs referred to in sub-section (2) of section 27 or sub-section (2) of section 28A, or sub-section (2) of section 28B of the Customs Act, 1962 (52 of 1962); (c) any income from investment of the amount credited to the Fund and any other monies received by the Central Government for the purposes of this Fund. [(d) the surplus amount referred to in sub-section (6) of section 73A of the Finance Act, 1994 (32 of 1994). IV. SECTION 12D. Utilisation of the Fund. - (1) Any money credited to the Fund shall be utilised by the Central Government for the welfare of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... specified therein and enclosures relating to the quarter for which refund is being claimed shall be filed by the claimant, before the expiry of the period specified in section 11B of the Central Excise Act, 1944 (1 of 1944). Para 3(g) of the notification 27/2012 ibid, further stipulates that at the time of sanctioning the refund claim the Assistant Commissioner or Deputy Commissioner shall satisfy himself or herself in respect of the correctness of the claim and the fact that goods cleared for export or services provided have actually been exported and allow the claim of exporter of goods or services in full or part as the case may be. That the claim ought to be made before the expiry of the period specified in Section 11B of the CEA was stipulated even in para 6 of the superseded notification 5/2006-Central Excise (N.T.), dated the 14th March, 2006 also. 17. It is evident from a plain reading of Section 11B(1) that any person claiming refund of any duty of excise shall: a) make an application for refund of such duty to the Assistant Commissioner/Deputy Commissioner of Central Excise, b) such application must be made before the expiry of one year from the relevant da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd have been complied, again a pointer to the fact that there must be a section, rule or notification that would lay down these parameters. However, the proviso to sub-section (2) of Section11B stipulates that the amount of duty of excise as determined by the Assistant Commissioner/Deputy Commissioner of Central Excise under sub-section (2) of Section 11B shall, instead of being credited to the fund, be paid to the applicant, if such amount is relatable to the situations as indicated in clauses (a) to (f) of the said proviso. Sub-section (3) of Section 11B further stipulates that notwithstanding anything to the contrary contained in any judgment, decree, order or direction of the Appellate Tribunal or any Court or in any other provision of this Act or the rules made thereunder or any other law for the time being in force, no refund shall be made except as provided in sub-section (2), thereby emphasizing yet again the requirement of overcoming the bar of unjust enrichment in order to be entitled to the refund being claimed. 20. Given the aforesaid position in law, we are of the view that the appellant's contention that clause (c) of the proviso to sub-section (2) of Section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aim is for refund of accumulated cenvat credit on account of closure of appellant's factory. We are therefore of the view that the said claim cannot come under the ambit of clause (d) ibid, for the aforesaid reasons. 22. Our aforesaid view is bolstered by the locus classicus, namely, the Judgement of the 9 Judge Constitution Bench in the case of Mafatlal Industries Ltd v. Union of India, 1996 INSC 1514, wherein in the Judgement of Hon'ble J.S. Verma, S.C.Agrawal, B.P. Jeevan Reddy, A.S. Anand and B.N. Kripal JJl, delivered by B.P. Jeevan Reddy, J., per majority, in para 80, has held as under: "80. Section 11B, as amended in 1991, has been set out in Para 10 hereinabove. Sub-section (1) of Section 11B says that every claim for refund shall be made before the Assistant Commissioner of Central Excise within six months of the relevant date. The application shall have to be in the prescribed form and manner and shall be accompanied by documentary and other evidence including those referred to in Section 12A to establish that the duty claimed by way of refund has not been passed on by him to any other person. The proviso to sub-section (1) expressly states that pending applications ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anufacturer, whether on the question of classification, valuation or any other issue, does not automatically entail refund. Section 11B of the Central Excise and Salt Act and Section 27 of the Contract Act, whether before or after 1991 amendment-as interpreted by us herein-make every refund claim subject to proof of not passing on the burden of duty to others. Even if a suit is filed, the very same condition operates. Similarly, the High Court while examining its jurisdiction under Article 226 - and this Court while acting under Article 32 - would insist upon the said condition being satisfied before ordering refund. Unless the claimant for refund establishes that he has not passed on the burden of duty to another, he would not be entitled to refund, whatever be the proceedings and whichever be the forum. Section 11B/Section 27 are constitutionally valid, as explained by us hereinbefore. They have to be applied and followed implicitly wherever they are applicable. (Emphasis supplied) B. WHETHER RULE 5 OF THE CENVAT CREDIT RULES, 2004 PROVIDES FOR CASH REFUND OF ACCUMULATED CREDIT. 24. It is the contention of the appellant that Rule 5 of the Cenvat Credit Rules, 2004 provid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation No.27/2012-CE(NT) dated 18-06-2012 as amended. While Rule 5A and Rule 5B too provide for refund of cenvat credit in certain circumstances they have neither been relied upon nor are relevant for the issue under consideration. No doubt, Rule 5 of the CCR too governs the refund of cenvat credit in the circumstances more specifically stipulated therein and the notification No.27/2012-CE (NT) issued under Rule 5 of the CCR specifies the conditions to be satisfied to seek refund of cenvat credit. A plain reading of the said Rule and the said notification, and particularly the requirement in para 3(g) of the notification No.27/2012 ibid which stipulates that at the time of sanctioning the refund claim the Assistant Commissioner or Deputy Commissioner shall satisfy himself or herself in respect of the correctness of the claim and the fact that goods cleared for export or services provided have actually been exported, leaves no room for any doubt that the refund under Rule 5 of CCR would arise only in respect of the unutilized cenvat credit accumulated in the course of engaging in export of goods and/or services. It is also pertinent that the findings on facts rendered by the lower au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is observed in the order dated 25th January 2007 passed by the Apex Court in Petition for Special Leave to Appeal (Civil) No. CC 467 of 2007 (Union of India vs Slovak India Trading Company Pvt Ltd.) can be read as a declaration of law under Article 141 of the Constitution of India?" (emphasis supplied) 29. It would be of profit to note some of the relevant findings of the Honourable High Court of Bombay in Gauri Plasticulture 2 ibid, which are reproduced below: "29. We do not think that by taking assistance of this provision, we will be able to hold as contended by Mr. Patil that the Cenvat credit can be refunded even in relation to those inputs which have not been used in the manufacture of the final product or the exported goods. We are called upon to read something in the substantive rule and which is totally absent therein. When Rule 5 follows Rule 4, which is titled as "Conditions for Allowing Cenvat credit", then, we must understand the scheme in such manner as would make the law workable and consistent. Refund of Cenvat credit in terms of Rule 5 is permissible only when there is a clearance of a final product of a manufacturer or of an intermediate product for export ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal's order and though the appeal of the Revenue before the High Court of Karnataka at Bengaluru raised several grounds and pleas, the High Court referred to the arguments and in para 4 of its order, reproduced Rule 5 of the Cenvat Credit Rules, 2002. In para 5, the reasoning of the High Court of Karnataka reads thus : "5. There is no express prohibition in terms of Rule 5. Even otherwise, it refers to a manufacturer as we see from Rule 5 itself. Admittedly, in the case on hand, there is no manufacture in the light of closure of the Company. Therefore, Rule 5 is not available for the purpose of rejection as rightly rules by the Tribunal. The Tribunal has noticed that various case laws in which similar claims were allowed. The Tribunal, in our view, is fully justified in ordering refund particularly in the light of the closure of the factory and in the light of the assessee coming out of the Modvat Scheme. In these circumstances, we answer all the three questions as framed in para 17 against the Revenue and in favour of the assessee." 32. Thus, the High Court of Karnataka took the view that there is no express prohibition in terms of Rule 5 and that rule refers to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ain Vanguard (supra), the question of law was expressly kept open. Hence, the earlier view of the Tribunal does not merge with dismissal of the Special Leave Petition in the case of Slovak India (supra). Hence, this principle has also no application. 40. As a result of the above discussion, we answer the questions of law framed above as (a) and (b) in the negative. They have to be answered against the assessee and in favour of the Revenue. Questions (a) and (b) having been answered accordingly, needless to state that the order of the Hon'ble Supreme Court in the case of Slovak India (supra) cannot be read as a declaration of law under Article 141 of the Constitution of India." (emphasis supplied) 31. Thus, the Bombay High Court in Gauri Plasticulture 2, rules against the appellants therein and in favour of the Revenue on both the grounds and as to the question of law framed, Whether what is observed in the order dated 25th January 2007 passed by the Apex Court in Petition for Special Leave to Appeal (Civil) No. CC 467 of 2007 (Union of India vs Slovak India Trading Company Pvt Ltd.) can be read as a declaration of law under Article 141 of the Constitution of India, it was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urts within the territory of India. According to the well-settled theory of precedents, every decision contains three basic ingredients: (i) findings of material facts, direct and inferential. An inferential finding of fact is the inference which the Judge draws from the direct or perceptible facts; (ii) statements of the principles of law applicable to the legal problems disclosed by the facts; and (iii) judgment based on the combined effect of (i) and (ii) above. For the purposes of the parties themselves and their privies, ingredient (iii) is the material element in the decision, for, it determines finally their rights and liabilities in relation to the subject-matter of the action. It is the judgment that estops the parties from reopening the dispute. However, for the purpose of the doctrine of precedent, ingredient (ii) is the vital element in the decision. This is the ratio decidendi. It is not everything said by a judge when giving a judgment that constitutes a precedent. The only thing in a judge's decision binding a party is the principle upon which the case is decided and for this reason it is important to analyse a decision and isolate from it the ratio decid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt. (emphasis supplied) 18. The doctrine of binding precedent helps in promoting certainty and consistency in judicial decisions and enables an organic development of the law besides providing assurance to individuals as to the consequences of transactions forming part of daily affairs. Thus, what is binding in terms of Article 141 of the Constitution is the ratio of the judgment and as already noted, the ratio decidendi of a judgment is the reason assigned in support of the conclusion. The reasoning of a judgment can be discerned only upon reading of a judgment in its entirety and the same has to be culled out thereafter. The ratio of the case has to be deduced from the facts involved in the case and the particular provision(s) of law which the court has applied or interpreted and the decision has to be read in the context of the particular statutory provisions involved in the matter. Thus, an order made merely to dispose of the case cannot have the value or effect of a binding precedent. (emphasis supplied) 19. What is binding, therefore, is the principle underlying a decision which must be discerned in the context of the question(s) involved in that case from which th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the issue cannot be deemed to be law declared, so as to have a binding effect as is contemplated under Article 141. An order made merely to dispose of the case cannot have the value or effect of a binding precedent. The obiter dictum of the Supreme Court is binding under Article 141 to the extent of the observations on points raised and decided by the Court in a case. Although the obiter dictum of the Supreme Court is binding on all courts, it has only persuasive authority as far as the Supreme Court itself is concerned. A decision is not an authority for what can be read into it by implication or by assigning an assumed intention of the judges and inferring from it a proposition of law which the judges have not specifically or expressly laid down in the pronouncement. In other words, the decision is an authority for what is specifically decides and not what can logically be deduced therefrom. DECISION MAKING AND PRECEDENT MAKING JUDGEMENTS 36. In this context, it would be also worthwhile to take note of what the Honourable Apex Court has said regarding its judgements being decision making judgements and precedent making judgements. The Supreme Court has further elaborat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e have also declared that even an obiter of this Court must be treated as a binding precedent for the High Courts and the courts below. In the process of decision making, this Court takes care to indicate the instances where the decision of the Supreme Court is not to be treated as precedent. It is therefore necessary to be cautious in our dispensation and state whether a particular decision is to resolve the dispute between the parties and provide finality or whether the judgment is intended to and in fact declares the law under Article 141" (emphasis supplied) 37. Another related concept that bears to be kept in mind here is the doctrine of stare decisis. The concept has clearly been outlined in the case of Shankar Raju v. Union of India (2011) 2 SCC 132. Relevant portion is as under: "10. It is a settled principle of law that a judgment, which has held the field for a long time, should not be unsettled. The doctrine of stare decisis is expressed in the maxim "stare decisis et non quieta movere", which means "to stand by decisions and not to disturb what is settled." Lord Coke aptly described this in his classic English version as "those things which have been so often adjud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el for the parties and having examined the law laid down by the Constitution Benches in the abovesaid decisions, we would like to sum up the legal position in the following terms: - (1) The law laid down by this Court in a decision delivered by a Bench of larger strength is binding on any subsequent Bench of lesser or co-equal strength. (2) A Bench of lesser quorum cannot doubt the correctness of the view of the law taken by a Bench of larger quorum. In case of doubt all that the Bench of lesser quorum can do is to invite the attention of the Chief Justice and request for the matter being placed for hearing before a Bench of larger quorum than the Bench whose decision has come up for consideration. It will be open only for a Bench of coequal strength to express an opinion doubting the correctness of the view taken by the earlier Bench of coequal strength, whereupon the matter may be placed for hearing before a Bench consisting of a quorum larger than the one which pronounced the decision laying down the law the correctness of which is doubted. 3.xxxx" 40. This principle of horizontal and vertical stare decisis has clearly been outlined by Justice S. Ravindra Bhat in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agraph 4 that Judicial discipline in the context of the hierarchical nature of the judicial system is intended to preserve the dignity of all institutions, whether at the level of District, High Court or Supreme Court, went on to hold as under: "8. Notwithstanding the aforesaid exercise which has been carried out bona fide by the Bench presided over by the Chief Justice, we are of the view that in a situation where the authority of this Court is undermined by gratuitous observations made by the Single Judge, it is the plain function of this Court to set right any attempt to dislocate the sanctity of judicial authority and maintenance of judicial discipline. We accordingly expunge the observations which have been made by Justice Rajbir Sehrawat in the order dated 17 July 2024 and expect that greater caution should be exercised in the future while dealing with orders of the Supreme Court and, for that matter, the orders passed by the Division Bench of the High Court. Whether individual judges are in agreement with the merits or otherwise of an order passed by a superior court is besides the point. Every Judge is bound by the discipline which the hierarchical nature of the judicial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5/2006 filed by the revenue. Learned ASG appearing for the Union of India fairly concedes that those decisions of the Tribunal, which were relied upon by the Tribunal, have not been appealed against. In view of the concession made by the learned ASG, this special leave petition is dismissed." (emphasis supplied) 45. It is seen that the Honourable Apex Court in Indian Aluminium Company Limited v. Thane Municipal Corporation, 1992 Supp (1) SCC 480 has noted the dictionary meaning of the word "concession" and held: "The common dictionary meaning of the word "concession" is "the act of yielding or conceding as to a demand or argument, something conceded; usually implying a demand, claim, or request," a thing yielded", "a grant"." 46. As can be seen from the order of the Hon'ble Apex Court in Slovak case reproduced supra, it emanates thus, undoubtedly in view of the concession made by the learned ASG. The Learned ASG yielded in his argument that the revenue department had not appealed in the other decisions placed before other CESTAT tribunals in similar matters. 47. In this regard, we must take note of the Supreme Court decision in Kulwant Kaur and Ors. v. Gurdial Sing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in NBCC (India) Ltd. v. The State of West Bengal & Ors. 2025 INSC 54, since the Court exercised its regular decision-making jurisdiction under Article 136 and disposed of the petition without allowing the leave to appeal and hearing the matter on its merits. Thus in Slovak the Apex court merely gave a quietus to the dispute inter se the parties therein without laying down any law. II. THE APEX COURT LEFT THE QUESTION OF LAW OPEN IN THE SLP PREFERRED BY REVENUE IN JAIN VANGUARD POLYBUTELENE LTD 51. In Jain Vanguard Polybutelene Ltd v CCE, Nashik, 2009 (247) ELT 658 (Tri-Mumbai), the question as to whether a claim for refund of unutilized CENVAT Credit availed by the assessee under Rule 5 of the Cenvat Credit Rules, 2004 is liable to be allowed on the ground of closure of their factory was considered and the tribunal relied upon the Karnataka High Court judgement in Slovak and also the dismissal of the SLP preferred by the Revenue in the Apex Court. On appeal by the department to the High Court of Bombay, the division bench in its decision in CCE, Nashik v Jain Vanguard Polybutelene Ltd, 2010 (256) ELT 523 (Bom) held as under: "3 ... Notwithstanding this concession, it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly it has been exercised sparingly and with caution and only in special and extraordinary situations. Beyond that it is not possible to fetter the exercise of this power by any set formula or rule." (emphasis supplied) 54. Therefore, while there is no restriction on the powers of the Supreme Court under Article 136, the Apex Court has imposed on itself certain guidelines as to when Special Leave to Appeals under Article 136 would be entertained. It has held that the situations must be special and extra-ordinary for the court to invoke is exceptional powers. However, it depends based on the facts and circumstances of the case and cannot be restricted by any set formula or rule. In short no test can be devised as to whether or not the power is to be exercised. 55. The Honourable Supreme Court has in Kunhayammed and Ors. v. State of Kerala and Ors, (2000) 6 SCC 359, held that: "13...Article 136 of the Constitution is a special jurisdiction conferred on the Supreme Court which is sweeping in its nature. It is a residuary power in the sense that it confers an appellate jurisdiction on the Supreme Court subject to the special leave being granted in such matters as may not be cover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w which has been declared. If the order of dismissal be supported by reasons then also the doctrine of merger would not be attracted because the jurisdiction exercised was not an appellate jurisdiction but merely a discretionary jurisdiction refusing to grant leave to appeal. We have already dealt with this aspect earlier. Still the reasons stated by the Court would attract applicability of Article 141 of the Constitution if there is a law declared by the Supreme Court which obviously would be binding on all the courts and tribunals in India and certainly the parties thereto. The statement contained in the order other than on points of law would be binding on the parties and the court or tribunal, whose order was under challenge on the principle of judicial discipline, this Court being the apex court of the country. No court or tribunal or parties would have the liberty of taking or canvassing any view contrary to the one expressed by this Court. The order of Supreme Court would mean that it has declared the law and in that light the case was considered not fit for grant of leave. The declaration of law will be governed by Article 141 but still, the case not being one where le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rving being dealt with by the apex court of the country and so on. The expression often employed by this Court while disposing of such petitions are - "heard and dismissed", "dismissed", "dismissed as barred by time" and so on. May be that at the admission stage itself the opposite party appears on caveat or on notice and offers contest to the maintainability of the petition. The Court may apply its mind to the merit worthiness of the petitioner's prayer seeking leave to file an appeal and having formed an opinion may say "dismissed on merits". Such an order may be passed even ex-parte, that is, in the absence of the opposite party. In any case, the dismissal would remain a dismissal by a non-speaking order where no reasons have been assigned and no law has been declared by the Supreme Court. The dismissal is not of the appeal but of the special leave petition. Even if the merits have been gone into, they are the merits of the special leave petition only. In our opinion neither doctrine of merger nor Article 141 of the Constitution is attracted to such an order. Grounds entitling exercise of review jurisdiction conferred by Order 47 Rule 1 of the C.P.C. or any other statutory p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e inclined to affirm the same, it is customary with this Court to grant leave to appeal and thereafter dismiss the appeal itself (and not merely the petition for special leave) though at times the orders granting leave to appeal and dismissing the appeal are contained in the a same order and at times the orders are quite brief. Nevertheless, the order shows the exercise of appellate Jurisdiction and therein the merits of the order impugned having been subjected to judicial scrutiny of this Court. 42." To merge" means to sink or disappear in something else; to become absorbed or extinguished; to be combined or be swallowed up. Merger in law is defined as the absorption of a thing of lesser importance by a greater, whereby the lesser ceases to exist, but the greater is not increased; an absorption or swallowing up so as to involve a loss of identity and individuality. (See Corpus Juris Secundum, Vol. LVII, pp. 1067-1068). 43. We may look at the issue from another angle. The Supreme Court cannot and does not reverse or modify the decree or order appealed against while deciding a petition for special leave to appeal. What is impugned before the Supreme Court can be reversed or mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in the order is a declaration of law by the Supreme Court within the meaning of Article 141 of the Constitution. Secondly, other than the declaration of law, whatever is stated in the order are the findings recorded by the Supreme Court which would bind the parties thereto and also the court, tribunal or authority in any proceedings subsequent thereto by way of judicial discipline, the Supreme Court being the Apex Court of the country. But, this does not amount to saying that the order of the court, tribunal or authority below has stood merged in the order of the Supreme Court rejecting special leave petition or that the order of the Supreme Court is the only order binding as res Judicata in subsequent proceedings between the parties. (vi) Once leave to appeal has been granted and appellate Jurisdiction of Supreme Court has been invoked the order passed in appeal would attract the doctrine of merger; the order may be of reversal, modification or merely affirmation. (vii) On an appeal having been preferred or a petition seeking leave to appeal having been converted into an appeal before Supreme Court the jurisdiction of High Court to entertain a review petition is lost ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecessary implication on facts, then the facts as adjudicated are binding on the courts, tribunals, adjudicating authorities from where the leave to appeal arose from. It would also be binding on the parties. Accordingly, the parties cannot appeal before any other forum on the same point of facts in a subsequent case. Moreover, this speaking order takes away the jurisdiction of any other court, tribunal, or authority to express any opinion in conflict with or in departure from the view taken by the Apex Court. 63. In the conclusion in para 44 (v), the Apex Court has pointed out that other than the declaration of law whatever is stated in the order are findings that would bind the parties and also the court, tribunal or authority in any proceedings subsequent thereto by way of judicial discipline. This however does not mean that the lower court, tribunal or adjudicating authority's order has merged with the order of the SC. Neither does it mean that the SC's order is the only order binding as res judicata in subsequent proceedings between the parties. This means that when the SLP has been dismissed and not admitted by a speaking order, apart from the declaration of law, if the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is passed thereafter, then whether the order is a speaking or non-speaking order and whether the order is one of reversal or of modification or of dismissal affirming the order appealed against, it would not matter a whit as such an order passed is an appellate order attracting the doctrine of merger. 66. The ratio of the decision in Kunhayammed was reaffirmed by another three judge bench of the Supreme Court in Khoday Distilleries Ltd. and Ors. v. Sri Mahadeshwara Sahakara Sakkare Karkhane Ltd (2019) 4 SCC 376, where the Apex Court in Para 27 held that "The conclusions rendered by the three Judge Bench of this Court in Kunhayammed and summed up in paragraph 44 are affirmed and reiterated". 67. Thus, it is clear that the Apex Court in Slovak's case had dismissed the SLP preferred by the Revenue only on a concession made by the Learned ASG. The Apex Court did not go into any question of law explicitly or implicitly, for the simple reason that there was no legal conclusion based on any legal principles raised explicitly or implicitly. Further, the Honourable Supreme Court itself in Kulwant Kaur stated explicitly that a concession, if made and in the event the Court proceeds on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on fact, save for the finding that the Ld. ASG had made a concession, that could be held to have a precedential effect under Article 141. In any event, it is very pertinent that while Kunyahammed does not at all examine or stipulate the effect of a dismissal of SLP based on a concession, the subsequent decision of the Honourable Supreme Court in Kulwant Kaur and Ors. v. Gurdial Singh Mann (Dead) by Lrs. and Ors., 2001 INSC 158: (2001) 4 SCC 262, in no uncertain terms has held that a decision based on a concession is not a binding precedent. Such law laid down by the Apex Court in Kulwant Kaur would decidedly be a binding precedent in so far as all the lower courts are concerned. Therefore, we are of the considered view that the Apex Court order in Slovak, does not operate as a binding precedent under Article 141 of the Constitution of India. 69. In this regard we are also bolstered in our conclusion by the decision of a three Judge Bench of the Honourable Apex Court in D. J. Malpani v CCE, Nashik, 2019 (366) ELT 385(SC), wherein it was held as under: "19. In this case, the CESTAT decided against the assessee relying on Panchmukhi (supra). The case of Panchmukhi (supra) wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decide which case to follow (Young v. Bristol Aeroplane Co. Ltd., 1944 KB 718 at 729 : (1944) 2 All ER 293 at 300); or when it has acted in ignorance of a House of Lords decision, in which case it must follow that decision; or when the decision is given in ignorance of the terms of a statute or rule having statutory force (Lancaster Motor Co. (London) Ltd. v. Bremith Ltd. (1941) 1 KB 675 : (1941) 2 All ER). A decision should not be treated as given per incuriam, however, simply because of a deficiency of parties (Morelle Ltd. v. Wakeling (1955) 2 QB 379 : (1955) 1 All ER 708 (CA)), or because the court had not the benefit of the best argument (Bryers v. Canadian Pacific Steamships Ltd. (1957) 1 QB 134 : (1956) 3 All ER 560 (CA) Per Singleton, L.J., affirmed in Canadian Pacific Steamships Ltd. v. Bryers1958 AC 485 : (1957) 3 All ER 572.]), and, as a general rule, the only cases in which decisions should be held to be given per incuriam are those given in ignorance of some inconsistent statute or binding authority (A. and J. Mucklow Ltd. v. IRC, 1954 Ch 615 : (1954) 2 All ER 508 (CA), Morelle Ltd. v. Wakeling (1955) 2 QB 379 : (1955) 1 All ER 708 (CA), see also Bonsor v. Musicians' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... directions on 16-2-1984, for the disposal of the case against the appellant by the High Court, the directions were given oblivious of the relevant provisions or law and the decision in Anwar Ali Sarkar case [State of W.B. v. Anwar Ali Sarkar, (1952) 1 SCC 1: AIR 1952 SC 75: 1952 Cri LJ 510]. See Halsbury's Laws of England, 4th Edn., Vol. 26, p. 297, para 578 and p. 300, the relevant Notes 8, 11 and 15; Dias on Jurisprudence, 5th Edn., pp. 128 and 130; Young v. Bristol Aeroplane Co. Ltd. [Young v. Bristol Aeroplane Co. Ltd., 1944 KB 718 (CA)] Also see the observations of Lord Goddard in Moore v. Hewitt [Moore v. Hewitt, 1947 KB 831] and Nicholas v. Penny [Nicholas v. Penny, (1950) 2 KB 466] "Per incuriam" are those decisions given in ignorance or forgetfulness of some inconsistent statutory provision or of some authority binding on the court concerned, so that in such cases some part of the decision or some step in the reasoning on which it is based, is found, on that account to be demonstrably wrong. SeeMorelle Ltd. v. Wakeling [Morelle Ltd. v. Wakeling, (1955) 2 QB 379: (1955) 2 WLR 672 (CA)]. Also, see State of Orissa v. Titaghur Paper Mills Co. Ltd. [State of Orissa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te of Bihar v. Kalika Kuer, (2003) 5 SCC 448, the legal dilemma was noted as under: "10. ... Easy course of saying that earlier decision was rendered per incuriam is not permissible and the matter will have to be resolved only in two ways - either to follow the earlier decision or refer the matter to a larger Bench to examine the issue, in case it is felt that earlier decision is not correct on merits." 109. In Sundeep Kumar Bafna v. State of Maharashtra, [2014] 4 SCR 486: (2014) 16 SCC 623, the Court expanded the definition of per incuriam in the Indian context and noted that: "A decision or judgment can also be per incuriam if it is not possible to reconcile its ratio with that of a previously pronounced judgment of a Co-equal or Larger Bench; or if the decision of a High Court is not in consonance with the views of this Court. It must immediately be clarified that the per incuriam rule is strictly and correctly applicable to the ratio decidendi and not to obiter dicta." 111. After having examined the above decisions, when dealing with the ignorance of a statutory provision, we may bear in mind the following principles. These may not however be exhaustive: (i) A de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as answered by a third member upon reference, the Tribunal has gone on to hold that the decision of the Honourable Supreme Court in Slovak case was a binding precedent under Article 141, and had consequently allowed the appeal of the appellant therein holding that the appellant is entitled to cash refund of CENVAT credit available with it at the time of closure of the factory. 73. We note that the finding by the Tribunal in M/s. ATV Projects supra that the decision of the Honourable Supreme Court in Slovak case was a binding precedent under Article 141 was a finding directly opposed to the Judgement of the jurisdictional three judge bench of the Honourable High Court of Bombay in Gauri Plasticulture 2, which after framing a specific question, namely, "Whether what is observed in the order dated 25th January 2007 passed by the Apex Court in Petition for Special Leave to Appeal (Civil) No. CC 467 of 2007 (Union of India vs Slovak India Trading Company Pvt Ltd.) can be read as a declaration of law under Article 141 of the Constitution of India?" has gone on to give a categorical answer in the negative that the order of the Hon'ble Supreme Court in the case of Slovak India (supra) c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only noted the submissions of both the parties one cited the Gujarat and the other the Andhra Pradesh High Court decisions, but had remanded the matter without expressing any view of the merits of the case on the applicability of the ratio of these decisions to the facts of the case. On the other hand, the other decision of the Tribunal in the case of Collector of Central Excise, Chandigarh v. Punjab Dairy Development Corporation Ltd., Chandigarh had followed the Gujarat High Court judgment which as already noted, was squarely on this issue with which, therefore, we are in agreement. It is also noted that on the Notification No. 38/78-C.E., there is no decision of any High Court contra to the Gujarat High Court." (emphasis supplied) Thus, the larger bench of the tribunal held that the concept of per incuriam is not applicable in a situation between a statutory tribunal and a high court. 76. Yet again, in 1997, another five member bench of the Principal Delhi Bench of the CEGAT in CCE v. Kashmir Conductors 1997 (96) E.L.T. 257 (Tribunal) held that Law declared by the Highest Court in the State is binding on authorities or Tribunals under its Superintendence. The relevant porti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10.2 In a recent decision of the Tribunal in the case of Madura Coats v. CCE, Bangalore reported in 1996 (82) E.L.T. 512, it has been held that the decision of a particular High Court should certainly be followed by all authorities within the territorial jurisdiction of that High Court and that the authorities in another State are not bound to follow the views taken by a particular High Court in the absence of a decision by the jurisdictional High Court with regard to constitutionality of a provisions. The Tribunal has held that since the adjudication of vires of a provision of a statute or Notification is outside the jurisdiction of the Tribunal and the jurisdictional High Court i.e., the High Court having jurisdiction over the authority and the assessee, has not struck down the provision or Notification as ultra vires, the Tribunal has to follow the same and the assessee is entitled to take the stand that he is entitled to the benefit of the particular provision or Notification since the jurisdictional High Court has not struck it down, even though some other High Court may have done so. In case the conflict of decisions among High Courts does not relate to vires of any provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce, in their view, mere taking of Cenvat credit wrongly by making entries in the Cenvat register would equally invite liability to interest since that is the proper interpretation of the Supreme Court ruling in Ind-Swift Laboratories Ltd. (supra). Learned Departmental Representative has also contended that the Hon'ble High Court of Bombay in Commissioner of Central Excise, Pune-I v. GL & V India Pvt. Ltd. - 2015 (321) E.L.T. 611 (Bom.) had considered the Supreme Court's decision in Ind-Swift Laboratories Ltd. (supra), the Karnataka High Court ruling in Bill Forge Pvt. Ltd. (supra) and the decision of the Madras High Court in Commissioner of Central Excise, Madurai v. Strategic Engineering (P) Ltd. - 2014 (310) E.L.T. 509 (Mad.) and held that the liability to interest would arise either on the taking or utilization of credit, irregularly. On behalf of Revenue, it is also contended that the Single Member decision of the Tribunal in Dr. Reddy's Laboratories Ltd. v. Commr. of C. Ex. & S.T., Hyderabad - 2013 (293) E.L.T. 81 (Tri.-Bang.) concluded that the Hon'ble Karnataka High Court's decision in Bill Forge Pvt. Ltd. is per incuriam, inter alia of Rule 3 of the Cenvat Credit Rules, 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision of another High Court, the same would not amount to an overruling of the said decision nor operates to operate eclipse the precedential value of the other High Court's ratio insofar as it applies as an exposition of law within the territorial limits of that High Court." 78. At this juncture, it would also be apposite to note the decision of the Honourable Apex Court in East India Commercial Co. Ltd, Calcutta v Collector of Customs, Calcutta, 1983 (13) ELT 1342 (SC), wherein the Apex Court has held as under: "29..............This raises the question whether an administrative tribunal can ignore the law declared by the highest court in the State and initiate proceedings in direct violation of the law so declared. Under Article 215, every High Court shall be a court of record and shall have all the powers of such a court including the power to punish for contempt of itself. Under Article 226, it has a plenty power to issue orders or writs for the enforcement of the fundamental rights and for any other purpose to any person or authority, including in appropriate cases any Government, within its territorial jurisdiction. Under Article 227 it has jurisdiction over all cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal ignores and brushes aside even orders of this Court. Had the Tribunal noted the facts in Ispat Industries Ltd. and Tata Motors Ltd. it would have possibly concluded that those orders would bind it in this case. Possibly because it was inclined to follow its Larger Bench decision, the facts in Cadbury were more or less identical, yet, it should not have held that this Court's orders are per incuriam. Per incuriam is a Rule or a principle applicable only when a judgment brushes aside a statutory provision or a binding precedent. The co-ordinate Bench cannot disregard or ignore a binding precedent unless it is found to be contrary to an express statutory provision or refuses to follow a binding decision of the Hon'ble Supreme Court of India or the jurisdictional High Court. In this regard, we would invite the attention of the Tribunal to the following paragraphs in the case of Assistant Collector of Central Excise, West Bengal v. Dunlop India Ltd. and Others reported in 1985 (19) E.L.T. 22, para 9 and 10 reads as under: - "9. We desire to add and as was said in Cassel and Co. Ltd. v. Broome - (1972) A.C. 1027, we hope it will never be necessary for us to say so again that ' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conspectus of judgements cited supra, it can be seen that the law has been clearly laid down by the Tribunal Larger Bench in the decision in J.K. Tyre Industries Ltd. v. Asst. Commr. Of C. Ex. Mysore 2016 (340) E.L.T. 193 (Tri. - LB) that the decision of the jurisdictional High Court is binding on the tribunal within its territorial jurisdiction. Since the ratio of Kashmir Conductors has been referred to and approved by the SC, the said decision too forms a binding precedent. In any event, the decision of the Apex Court itself in East India Commercial Co. Ltd, Calcutta v Collector of Customs, Calcutta, 1983 (13) ELT 1342 (SC) and Assistant Collector of Central Excise, West Bengal v. Dunlop India Ltd. and Others reported in 1985 (19) E.L.T. 22, as noticed in the Bombay High Court Judgement in Ceat cited supra, puts it beyond the pale of any controversy that a judgement of the jurisdictional high Court is binding on all judicial authorities within its jurisdiction. In fact, the Honourable Apex Court has in Honourable Apex Court in South Central Railway Employees CO-OP Credit Society Employees Union v. B. Yashodabai and others, [2014] 12.S.C.R 370 and Mary Pushpam v. Telvi Curus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (13) ELT 1342 (SC) Assistant Collector of Central Excise, West Bengal v. Dunlop India Ltd. and Others reported in 1985 (19) E.L.T. 22, South Central Railway Employees CO-OP Credit Society Employees Union v. B. Yashodabai and others, [2014] 12.S.C.R 370 and Mary Pushpam v. Telvi Curusumary & ors, 2024 INSC 8 mandated that the Tribunal implicitly and unreservedly adhere to the three Judge Bench decision of the Bombay High Court in Gauri Plasticulture 2. III. The Tribunal also omitted to observe that even prior to the Apex Court decision in Gangadhar Palo, a division bench of the SC constituted in 2012, another division bench of the Honourable Supreme Court in 2010 in Fuljit Kaur v. State of Punjab, 2010 (262) E.L.T. 40 (S.C.) held that "8. There is no dispute to the settled proposition of law that dismissal of the Special Leave Petition in limine by this Court does not mean that the reasoning of the judgment of the High Court against which the Special Leave Petition has been filed before this Court stands affirmed or the judgment and order impugned merges with such order of this Court on dismissal of the petition. It simply means that this Court did not consider the case worth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... COURT) and The Commissioner, Goods and Service Tax Commissionerate Vs M/S Shree Krishna Paper Mills and Industries Ltd. And Ors. [2019 (12) TMI 1348 PUNJAB AND HARYANA HIGH COURT]. We notice that the aforementioned two Rajasthan High Court decisions have followed the decision of the Karnataka High Court in slovak case and were rendered prior to the three Judge Bench decision of the Bombay High Court in Gauri Plasticulture 2 and are thus distinguishable. The decision of the Punjab and Haryana High Court, while noticing the Bombay High Court decision in Gauri Plasticulture 2, however, cited judicial discipline to hold that the earlier decision of the coordinate bench of the same high court was binding on them. No decision of the jurisdictional Madras High Court on this aspect has been brought to our notice. On the contrary, we find that, post the decision of the Honourable High Court of Bombay in Gauri Plasticulture 2, a coordinate bench of this Tribunal in M/s. Alfred Berg & Co ( I) Pvt Ltd. v. Commissioner of GST & Central Excise, Chennai, reported in2023 (8) TMI 243-CESTAT CHENNAI, and in Welcure Drugs & Pharmaceutical Ltd v. CCE & CGST, Alwar, (2023) 5 Centax 37 (Tri-Del), h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Maharashtra 2021 INSC 284 while explaining the operation of principle of stare decisis vertically has also held that the decisions of appellate courts in the superior in vertical hierarchy, bind tribunals and courts lower in the hierarchy and we have elaborated supra why and how the Judgement of the three Judge Bench of the Bombay High Court in Gauri Plasticulture 2 is binding on us. 88. We have also independently arrived at our conclusion that the Apex Court Order in Slovak does not operate as a binding precedent under Article 141 as discussed above, which too is in consonance with the decision of the Bombay High Court in Gauri Plasticulture 2. In such circumstances, we are of the firm view that judicial discipline and decorum known to law requires, nay warrants, that decisions of Courts superior in hierarchy should be followed. Since the jurisprudence of binding precedents as elaborated in our discussions above, necessarily makes it imperative for us to follow the Bombay High Court decision in Gauri Plasticulture, equally it also simultaneously obviates the necessity for us to then express our dissonance with the decision in M/s. ATV Projects so as to refer the matter to the P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ciency."(Emphasis supplied) 21. Therefore, the attempt of the High Court to read down the provision by way of substituting the word "or" by an "and" so as to give relief to the assessee is found to be erroneous. In that regard the submission of the counsel for the appellant is well founded that once the said credit is taken the beneficiary is at liberty to utilise the same, immediately thereafter, subject to the Credit Rules." " 92. In H.H. Prince Azam Jha Bahadur (Dead) through L.Rs v. Expenditure Tax Officer and Ors (1971) 3 SCC 621, the Hon'ble Supreme Court held that: "10. It does look somewhat anomalous and illogical that where the expenditure has been incurred by the wife and minor children who are altogether independent of the assessee and which has no connection with their being dependent on him or with any property transferred to them should be included in the expenditure of the assessee. The position would be similar where the wife is the assessee and the expenditure incurred by the husband comes to be included in computation of her liability to tax because the word used is "spouse" in Section 2(g) (i). But it must be remembered that logic or reason cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner of Income, 2010 (8) SCC 739 the Apex court held as follows: "27. It is trite law that a taxing statute is to be construed strictly. In a taxing Act one has to look merely at what is said in the relevant provision. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. There is no room for any intendment. There is no equity about a tax. (See: Cape Brandy Syndicate v. Inland Revenue Commissioners (1921) 1 KB 64 and Federation of A.P. Chambers of Commerce and Industry and Ors. v. State of A.P. and Ors.(2000) 6 SCC 550. In interpreting a taxing statute, the Court must look squarely at the words of the statute and interpret them. Considerations of hardship, injustice and equity are entirely out of place in interpreting a taxing statute. (Also see: Commissioner of Sales Tax, Uttar Pradesh v. The Modi Sugar Mills Ltd. 1961 (2) SCR 189.)" (emphasis supplied) 95. The general principles of taxing statutes that can be culled out are: A. Taxing statutes are not subject to equitable considerations. Nor can they be subject to moral presumptions and assumptions. B. One must interpret a taxing statute in the light of what is clearly expressed. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reasonable objective of the statute" and the court should determine whether the statute has been followed sufficiently so as to carry out the intent of the statute and accomplish the reasonable objectives for which it was passed. Refunds and Exemption are Governed by Rule of Strict Compliance 5.8 Fiscal statute generally seeks to preserve the need to comply strictly with regulatory requirements that are important, especially when a party seeks the benefits of an exemption clause that are important. Substantial compliance of an enactment is insisted, where mandatory and directory requirements are lumped together, for in such a case, if mandatory requirements are complied with, it will be proper to say that the enactment has been substantially complied with notwithstanding the non-compliance of directory requirements. In cases where substantial compliance has been found, there has been actual compliance with the statute, albeit procedurally faulty. The doctrine of substantial compliance seeks to preserve the need to comply strictly with the conditions or requirements that are important to invoke a tax or duty exemption and to forgive non-compliance for either unimportant and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o proceed according to the mandate of the statute governing the subject. Claim of refund is not a matter of right unless vested by law. That would depend upon the object of the statute and eligibility. The purpose for which law has been made and its nature, the intention of the legislature in making the provision, the relation of the particular provision to other provisions dealing with the subject including the language of the provision are considerable factors in arriving at the conclusion whether a particular claim is in accordance with law. No injustice or hardship can be raised as plea to claim refund in absence of statutory mandate in that behalf and no equity or good conscience influence fiscal courts without the same being embedded to the statutory provisions..." 97. The Larger bench of the Tribunal in its decision in Steel Strips supra, has then gone on to conclude as under: 5.16 Modvat law has codified procedure for adjustment of duty liability against Modvat Account. That is required to be carried out in accordance with law and unadjusted amount is not expressly permitted to be refunded. In absence of express provision to grant refund, that is difficult to entertain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cate does not state the reason for such accumulation of credit and the cenvat credit balance as on 20-04-2015 has been certified vide the certificate dated 21.04.2015. The appeal records only state that the appellant stopped the manufacturing operation with effect from 31st January 2015 and cleared the underlying stock of manufactured goods on payment of applicable central excise duty. There is no mention anywhere including the CA Certificate as to whether or not there were duty paid inputs and capital goods available when they stopped the manufacturing operation and as to the nature of their disposal. The Honourable Apex Court in its decision in Commissioner of Central Excise, Chennai-III v. Grasim Industries, 2015 (318) ELT 594 (SC), has held as under: 7. Two things which emerge from the reading of the aforesaid judgment and need to be emphasized are as under : (i) in attracting the principle of unjust enrichment it is not only the actual burden which is passed on to the another person that would be taken into consideration even if the incident of such duty had not been passed on by him to any other person; (ii) the principle of unjust enrichment shall be applicable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. Where the burden of the duty has been passed on, the claimant cannot say that he has suffered any real loss or prejudice. The real loss or prejudice is suffered in such a case by the person who has ultimately borne the burden and it is only that person who can legitimately claim its refund. But where such person does not come forward or where it is not possible to refund the amount to him for one or the other reason, it is just and appropriate that that amount is retained by the State, i.e., by the people. There is no immorality or impropriety involved in such a proposition. The doctrine of unjust enrichment is a just and salutory doctrine. No person can seek to collect the duty from both ends. In other words, he cannot collect the duty from his purchaser at one end and also collect the same duty from the State on the ground that it has been collected from him contrary to law. The power of the Court is not meant to be exercised for unjustly enriching a person. The doctrine of unjust enrichment is, however, inapplicable to the State. State represents the people of the country. No one can speak of the people being unjustly enriched." (vii) While examining the claims for refu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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