9911796707
TMI Blog2025 (5) TMI 1017X X X X Extracts X X X X X X X X Extracts X X X X ..... ranting refund to the petitioners. 4. For the sake of convenience, Special Civil Application No.11793 of 2023 is treated as a lead matter. 5. Brief facts of the case are that the petitioner no. 1 is a company incorporated and registered under the relevant provisions of the Companies Act, 1956 and manufactures various excisable products such as Electric Energy Saving Lamp, Vitrified Tiles, Quartz Clock, etc. at the unit in Kutch. 6. Pursuant to the massive earthquake in the District of Kutch in the year 2001, the Central Government had issued Notification No. 39/2001-CE dated 31.7.2001 granting exemption to excisable goods (other than those specified in the Annexure to this notification) cleared from units in Kutch. The said Notification was amended from time to time thereafter. Since the petitioner's unit is in the District of Kutch, it has been availing the benefits of Notification No. 39/2001- CE dated 31.7.2001 and of amended notification and the petitioner had been filing refund claims from time to time. 7. For the period from June 2008 to November 2008, the petitioner had filed refund claims totaling of Rs. 3,67,09,703/- towards basic excise duty paid from PLA on finis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Application by CESTAT, the respondent no. 4 herein inter alia passed consequential Refund Orders, and the following amounts were refunded to the petitioner: "i. Refund Order No, 167/2009/10 dated 30.11.2009 for an amount of Rs. 38,77,819/- for the period of June 2008. ii. Refund Order No. 168/2009/10 dated 30.11.2009 for an amount of Rs. 35,20,255/- for the period of July 2008. iii. Refund Order No. 169/2009/10 dated 30.11.2009 for an amount of Rs. 72,17,806/- for the period of August 2008. iv. Refund Order No. 170/2009/10 dated 30.11.2009 for an amount of Rs. 75,35,235/- for the period of September 2008. v. Refund Order No. 171/2009/10 dated 30.11.2009 for an amount of Rs. 78,11,031/- for the period of October 2008. vi. Refund Order No. 172/2009/10 dated 30.11.2009 for an amount of Rs. 67,31,011/- for the period of November 2008. vii. Refund Order No. 180/2009/10 dated 22.12.2009 for an amount of Rs. 1,94,94,450/- (Annual Difference 2008-09). " 12. In March 2010, the Department filed an appeal, bearing Appeal No. V2/3/EA2/RAJ/2010, before the respondent no. 2 against the aforesaid consequential Refund Order Nos.167 to 172/2009/10 dated 30.11.2009. The said appeal wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Department's Appeal No. V2/3/EA2/RAJ/2010 against the aforesaid consequential Refund Order Nos. 167 to 172/2009/10 dated 30.11.2009 were required to be dismissed. The petitioner also submitted that if any further submissions, clarification or documents are required, the appeal may be posted on any other date to enable the petitioner to make effective hearing in the matter 18. However, the respondent no. 2 proceeded to allow the Department's Appeal No. V2/3/EA2/RAJ/2010 vide the impugned Order in Appeal No. KCH-EXCUS-000-APP-037- 2023 dated 18/19.5.2023 (received by the petitioner on 5.6.2023). 19. Being aggrieved, the petitioner has preferred the present petition. 20. The issue raised in all these petitions is same. For ready reference, a chart is made to highlight individual facts of each case : Sr. No. SCA No. Period covered Details of consequential refund order following order of Commissioner(Appeals) dated 25.03.2009 1 11797/2023 Annual claim for differential duty paid in respect to 2008- 2009 i) Refund order dated 22.12.2019 for Rs.1,94,94,450/- in respect of differential refund for 2008-2009 2 11794/2023 September- November 2009 i) Refund orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n percentage of value addition as per the rate specified in Notification No.33/2008 dated 10.06.2008 as all the final product manufactured and cleared by the petitioners under area based exemption notification falls under Entry at SL. No.16 of the Table of the said Notification as all other goods other than goods covered in SL. No. 1 to 15 of the notification and the percentage of refund specified in SL No.16 is 36% of the total duty paid on the said goods. It was therefore, submitted that since all the goods are covered under single category under SL No.16 and 36% is prescribed rate, the petitioners have claimed refund on the total duty paid in PLA account and total duty paid utilizing Cenvat Credit together for arriving at percentage and the adjudicating authority was not justified in computing duty separately for each product and thereafter arrive at percentage of refund. It was submitted that the Commissioner (Appeals) under the order dated 25.03.2009 accepted that the method adopted by the petitioner was correct for arriving at the total duty paid on the goods under Serial No.16 together and arriving at total duty payment taking duty payment from PLA account and Cenvat account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... required to be relegated to avail alternative remedy. 27. It was therefore, submitted that none of the criteria prescribed by the Hon'ble Apex Court for entertaining the writ are present in the facts of the present case and the petitioner therefore, may be relegated to alternative efficacious remedy as per the provisions of section 35B of the Act. 28. It was further submitted that respondent no.2 has taken into consideration the conditions prescribed in the Notification No.39/2001-CE as amended by Notification No.33/2008-CE dated 10.06.2008 and thereafter, held that correct value addition can be determined if the duty payment is computed separately for each product. It was therefore, submitted that if the refund is computed on the basis of the duty paid on all the products, then the value addition on individual product is not considered whereas refund is regulated on the basis of the value addition, and hence the respondent no.2 has rightly held that the value of each respective product is required to be considered and the product cannot be considered collectively together only because they are falling under Sl. No. 16 of the Notification. It was therefore, submitted that no int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion shall be given effect to in the following manner, namely: - (a) the manufacturer shall submit a statement of the total duty paid and that paid by utilization of CENVAT credit, on each category of goods specified in the said Table and cleared under this notification, to the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise, as the case may be, by the 7th of the next month in which the duty has been paid; (b) the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise, as the case may be, after such verification as may be deemed necessary, shall refund the duty payable on value addition, computed in the manner as specified in paragraph 2 to the manufacturer by the 15th of the month following the one in which the statement as at clause (a) above has been submitted." 30. On perusal of the above clause of Notification No.39/2001, it is discernable that the petitioner is entitled to the refunds on account of duty payable on value addition equivalent to the amount calculated as a percentage of the total duty payable on the said excisable goods of the description specified in column(3) of the Table and falling within th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore I find that the correct method for arriving at the total duty paid on the said goods is to take all the items falling under Sl.No. 16 together and arrive at the total duty payment taking the duty payment from PLA and CENVAT account of the items together. Thereafter, from the total duty paid together, the percentage should be calculated for. granting rebate. In the present case the total duty paid in PLA on the eligible goods is Rs. 1,75,52,776/- and total CENVAT utilized Rs. 1,10,66, 038/- and as per the Notification No. 33/2008 the 36% is the prescribed rate eligible for refund which comes to Rs.1,03,02,773/- which is less than the amount paid in PLA. Thus, the appellants are eligible for refund of R$.1,03,02,773) - Further as discussed in the preceding paragraph the appellants are eligible to utilize the CENVAT credit of Rs. 16,91,422/- towards duty payment on Vitrified Tiles and consequently eligible for re- credit of equivalent amount in their PLA account as the same has been discharged from PLA. The revised duty payment particulars would be as under: PLA CENVAT TOTAL RATE. Eligible Amount Rs. 1,58,61,354/- Rs.1,27,57,460 Rs. 2,86,18,814/- 36% Rs. 1,03,0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or exemption under this notification, the exemption contained in this notification shall be available subject to the condition that the manufacturer first utilizes whole of CENVAT credit available to him on the last day of the month under consideration for payment of duty on goods cleared during such month and pays only the balance amount in cash. 2. The exemption contained in this notification shall be given effect in the following manner, namely (a) (b) Provided that in cases, where the exemption contained is not applicable to some of the goods produced by a manufacturer, such refund shall not exceed the amount of duty paid less the amount of CENVAT availed of, in respect of duty paid on the inputs used in or in relation to the manufacture of the goods cleared under this notification." 6.1 The said Notification was partially amended vide Notification 33/2008-CE wherein the provision for computing the amount of refund was regulated at a specified rate: However the condition regarding utilization of available Cenvat credit prior to payment from PLA was not altered. The Sl. No 16 of the said notification is a residual entry covering all the products other than those speci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... required to be deprecated by all means in view of the fact that respondent no.2 could not have taken a different view than what was taken by his predecessor in order dated 25.03.2009. Respondent no.2 being Commissioner (Appeals) could not have differed with his coordinate rank Commissioner (Appeals) who was his predecessor by observing that the said appellate order of the predecessor not being an order from higher authority is not binding precedent for successor. Such an opinion of the Commissioner (Appeals) is contrary to the judicial discipline as any order passed by the same ranking officer is binding upon the successor when the said order of his predecessor has achieved finality. 36. At this stage, it would be pertinent to take note of following decisions: 1) In case of Union of India v. Kamlakshi Finance Corporation Ltd reported in 1991 (55) ELT 433 (SCC), wherein Hon'ble Supreme Court has held as under: "6. Sri Reddy is perhaps right in saying that the officers were not actuated by any mala fides in passing the impugned orders. They perhaps genuinely felt that the claim of the assessee was not tenable and that, if it was accepted, the Revenue would suffer. But what Sri R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assed by an authority subordinate to him, if not satisfied with this legality or propriety, may direct such authority to apply to the Collector (Appeals) for the determination of such points arising out of the decision or order as may be specified by the Collector of Central Excise in his order and there is a further right of appeal to the department. The position now, therefore, is that, if any order passed by an Assistant Collector or Collector is adverse to the interests of the Revenue, the immediately higher administrative authority has the power to have the matter satisfactorily resolved by taking up the issue to the Appellate Collector or the Appellate Tribunal as the case may be. In the light of these amended provisions, there can be no justification for any Assistant Collector or Collector refusing to follow the order of the Appellate Collector or the Appellate Tribunal, as the case may be, even where he may have some reservations on its correctness. He has to follow the order of the higher appellate authority. This may instantly cause some prejudice to the Revenue but the remedy is also in the hands of the same officer. He has only to bring the matter to the notice of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay record that we are conscious that such order is appealable in terms of statutory appeals provided under Central Excise Act, 1944. However, we find that the Adjudicating Authority committed serious error in disregarding binding precedent and that there are absolutely no disputed facts. We would, therefore, not insist that the petitioners once again follow the same gamut of taking the appeal route. To revert back to the issue at hand, we may recall that the question of computation of education cess and secondary and higher education cess was decided finally by the Tribunal in favour of the petitioners. As of now, such decision of the Tribunal holds the field. Such decision of the Tribunal would be binding on the Adjudicating Authority. Even if the Department is of the opinion that the issue is not free from doubt, it is not open for the Adjudicating Authority to ignore the binding precedent. We may notice that under the Central Excise Act, 1944 and the Customs Act, the Department has the right to appeal even against the order- in-original passed by the Adjudicating Authority. This is in contrast to the provisions contained in the Income-Tax Act, 1961 where against an order passed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Customs to call for and examine the record of any proceeding in which an adjudicating authority subordinate to him has passed any decision or order under the Act for the purpose of satisfying himself as to the legality or propriety of any such decision or order and to direct such authority to apply to the Commissioner (Appeals) for the determination of such points arising out of the decision or order as may be specified by the Commissioner in his order. Sub-section (4) thereof provides for preferring an appeal against the order of the concerned authority. In the circumstances, if the adjudicating authority was of the view that the doctrine of unjust enrichment had not been examined while making the order of refund, the proper course to adopt was to take recourse to the provisions of section 129D. A perusal of the order-in-original dated 15.02.2006 shows that the adjudicating authority has held that the refundable amount of Rs.2,42,110/- is required to be credited to the Consumer Welfare Fund established under section 12 C of the Central Excise Act, 1944 and that the same cannot be refunded to the party by appropriating against outstanding Government dues of Rs.2,75,306/- of Cust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal have due deference and regard for decisions rendered by the Tribunal, the elements of certainty and consistency in the judicial process which lie at the heart of judicial functioning would be seriously disrupted. We are constrained to make this observation because it is necessary for Court and Tribunals to realize the importance of judicial consistency and certainty in decision making. Judges individually in the discharge of their functions are independent adjudicators. But both individually and as constituents of institutions of which we are a part, judges are bound by a sense of judicial discipline. That discipline is rigorous but nothing less than a strict adherence to judicial discipline can be acceptable in the work that judges discharge. Benches of a Tribunal must conform to the discipline that the doctrine of precedent exacts. The respect which independent adjudicators in our country command has been assiduously built up over small incremental steps. Consistency and certainty is an important element in the judicial process. They are foundations of the rule of law. These are not just elements of judicial tradition but form part of constitutional principle. They ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as discussed above and document submitted by the appellant including agreement made between MTV India Ltd. and Various Cable Operators. It is observed that The STO has levied Tax on Rs. 69,38,502/- treating it as taxable TO of sale under BST Act @ 4% without mentioning the schedule entry under which tax has been levied. This amount is infact the Distribution income of the appellant from India. This amount infact represent the income received by the appellant towards the subscription charges levied on the viewers, which are in turn collected through local Cable operator. This subscription charges are levied against the Audio & Visual Transmission received by the viewer on his Television set. These are received as "radio waves on the antenna installed by cable operator : who in turn distribute these signals through cable in his local area. This fact was confirmed from the copies of agreement between appellant and various cable operators which are brought on record. So it is clear that the said income does not arise out of sale of goods defined in BST Act, 1959. As per Hon'ble Supreme Court judgment in case of M/s. BSNL Ltd. It is decided that goods do not include electromagn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowed by the second respondent by order dated 27-8-1998, reducing the duty. Thus, the application was well within the period of two months from the date on which the order passed by the appellate authority. The first respondent considered the application for refund and passed an order dated 21-1-1999, ordering refund, but directing payment of amount to the Consumer Welfare Fund. Once again, the petitioner filed appeal before the Commissioner, who by order dated 21-6-2001, allowed the appeal, holding that since this was duty paid on demand, there was no question of the petitioner passing on the duty burden to any consumer, and therefore, the petitioner was entitled to refund in its entirety. There was also a positive direction to grant refund. Unfortunately, the first respondent, who appears to have assumed the role, as being guardian of State finances, has passed the impugned order, holding that the claim for refund is hit by limitation. The attempt of the first respondent is to somehow circumvent the order passed by the Commissioner (Appeals). This attempt cannot be encouraged and such attempts have been deprecated by the Hon'ble Supreme Court as pointed above. These are all s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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