Andhra Sugars Limited Vs Commissioner of Central Tax (CESTAT Hyderabad)
In a significant judgment that underlines the importance of judicial discipline, the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Hyderabad, recently ruled in favour of Andhra Sugars Limited in a case against the Commissioner of Central Tax.
The case centered on a refund claim filed by Andhra Sugars Limited. The Department disagreed with the Assistant Commissioner’s decision to sanction the refund, leading to a series of appeals and protective demands. Despite previous decisions by the Tribunal and the High Court, the Commissioner (Appeals) held the Tribunal’s order as ‘per incuriam’ and upheld the Revenue’s contention.
This action led to the reopening of a case already decided by the Tribunal, a move that went against the principles of judicial discipline. The CESTAT highlighted that the Commissioner (Appeals) had overstepped his bounds by reviewing a Tribunal’s order that had already gained finality due to lack of appeal. The Department’s selective application of review processes was criticized as a mockery of the judicial process.
The CESTAT finally set aside the impugned order and allowed the appeal, reemphasizing the necessity of respecting previous decisions and maintaining judicial discipline.
The CESTAT Hyderabad’s ruling in the case of Andhra Sugars Limited vs. Commissioner of Central Tax underscores the importance of judicial discipline and the finality of Tribunal’s orders. It sends a strong message against the reopening of cases that have already reached finality, thereby maintaining the integrity and coherence of the judicial process. This judgment will undoubtedly serve as a critical reference in similar future cases.
FULL TEXT OF THE CESTAT HYDERABAD ORDER
In this unique case of violation of judicial discipline, the impugned order dated 18.08.2017 passed by Commissioner (Appeals), Guntur, is under challenge.
2. Brief facts of the case are that M/s The Andhra Sugars Limited, the appellants, filed a refund claim before the Assistant Commissioner for an amount of Rs.4,51,294/- for the reason that the quantity of caustic soda lye, the appellant have supplied to M/s NALCO, was less than the invoiced quantity and therefore, there was excess payment of duty. It is also not disputed that the receiver NALCO has paid the amount equivalent to the quantity of the material received by them and availed CENVAT credit only on the quantity received by them. The Assistant Commissioner has sanctioned the refund claim. The Department being aggrieved of the same filed an appeal before the Commissioner (Appeals) who rejected the Departmental appeal. On an appeal filed by the Department, CESTAT vide Final Order No.30507-30512/2018 dated 17.04.2018 dismissed the Department’s appeal. A protective demand dated 10.06.2014was issued to the appellants on the ground that an appeal was filed against the CESTAT order relied upon by the lower authority for sanctioning the refund. The Adjudicating Authority vide OIO No.25-35/2020 -CE dated 21.09.2020 dropped the proceedings holding that there was no erroneous refund also relying upon Tribunal’s Final Order No.968-969/2009 dated 17.05.2009 and the dismissal of Revenue’s appeal by the Hon’ble High Court on monetary grounds. The said OIO was again reviewed and an appeal was filed with Commissioner (Appeals) who passed the impugned order dated 15.07.2022.
3. Mr. Mohd. Rahim, appearing on behalf of the appellants submits that it is incorrect for the Department to accept the final order No. A/30507-30512/2018 dated 17.04.2008 and appeal against parallel protective SCN proceedings; the lower authority erred in finding that the previous decision of the Tribunal as “per incuriam”; in doing so, the Department is making the Tribunal to review its previous decisions instead of following the same; it was open for the Department not to withdraw the appeals pending before Hon’ble High Court even though on monetary grounds; there is no difference in the facts in the current case and the previous decisions of the Tribunal, the principles of res judicata should be honoured.
4. On the merits of the case, learned Counsel submits that the contention in the OIA, that the appellant has not paid duty to the Department and hence, he is not eligible for refund under Section 11B of Central Excise Act, 1944, is incorrect; a plain reading of the section makes it clear that “a buyer” who has borne the burden of duty and has not passed on the same can claim refund; Tribunal in the Final Order No.968-969/2009 dated 07.05.2009 has discussed the issue on merits also by applying the provisions of Section 11B to the facts of the case and therefore, the appellants are eligible for refund. Learned Counsel submits that Department is resorting to multiple reviews against the same cause of action, which is not permissible under law; Department is bound by the decisions of Higher Appellate Tribunal and the High Court in the appellant’s own case instead of taking a contrary stand. He relies upon the following case laws:
