Vedanta Limited Vs Union of India (Orissa High Court)
Conclusion: Once the earlier Order-in-Appeal determining assessee’s entitlement to drawback had attained finality and was accepted by the Department, the Commissioner (Appeals) in a subsequent proceeding could not reopen or revisit the issue of eligibility for drawback while examining the consequential order.
Held: Assessee-company was a manufacturer having units in SEZ and DTA, applied for fixation of brand rate of duty drawback under the Customs and Central Excise Duty Drawback Rules, 1995. Principal Commissioner (Appeals), by Order-in-Appeal dated 30-09-2023, allowed drawback in respect of four Bills of Export at the brand rate of 15.61%, subject to reversal of the input tax credit (ITC). Department accepted the said appellate order and did not challenge it before any higher forum. Pursuant thereto, Assistant Commissioner passed a consequential Order-in-Original dated 24-01-2024 sanctioning drawback after adjustment of reversed ITC. Subsequently, in appeals filed both by assessee and the Department against the consequential order, Commissioner (Appeals) by Order-in-Appeal dated 30-09-2025 held that since assessee had availed ITC, it was not entitled to drawback and set aside the Order-in-Original granting drawback. It was held that once the earlier Order-in-Appeal dated 30-09-2023 determining the assessee’s entitlement to drawback had attained finality and was accepted by the Department, Commissioner (Appeals) in a subsequent proceeding could not reopen or revisit the issue of eligibility for drawback while examining the consequential order. Such an exercise amounted to reviewing or nullifying the earlier appellate order without any statutory power of review and was contrary to the doctrine of functus officio, principles of issue estoppel, and judicial discipline laid down by the Supreme Court in Union of India v. Kamlakshi Finance Corporation Ltd. The impugned Order-in-Appeal was therefore without jurisdiction. Accordingly, the impugned order was set aside and the matter was remitted to the Commissioner (Appeals) for consideration of the pending appeals strictly in accordance with the earlier appellate findings which had attained finality.
