2011 (1) TMI 1022 - AT - Central Excise

Demand of duty - using the brand name by the other manufacturer for which the appellants are in entitled for SSI exemption - protective show-cause notice was issued to the appellants while the proceedings were pending before this Tribunal and the same was not brought in the knowledge of the Tribunal - Held that - If there is any grievance of the department, they should have come before this Tribunal in the proceedings which were pending there. As department did not take any steps to contest the issue before this Tribunal and the same has attained finality which has been followed by the adjudicating authority in this case as judicial discipline, the show-cause notice was dropped. In the impugned order, the lower appellate authority has in going into this aspect at all and taken the submissions of the revenue and passed the order impugned which is not correct in the eyes of law. It is well settled law in the case of Kamakshi (1991 (9) TMI 72 - SUPREME COURT OF INDIA) judicial discipline is to be followed by lower courts. In this case the lower appellate authority has not followed the judicial disciple, hence, no other option to set aside the impugned order. Appeal allowed.

Summary

Issues:
1. Challenge of impugned order on grounds of being ex-parte and failure to rebut findings of lower appellate authority.
2. Validity of refund claim rejection and subsequent appeal process.
3. Adjudication of show-cause notice for recovery of erroneous refund.
4. Compliance with judicial discipline in following higher appellate authorities' decisions.
5. Lack of notice receipt by appellants during proceedings before Commissioner (Appeals).

Analysis:
1. The appellants challenged the impugned order on the grounds of being ex-parte and failing to rebut the findings of the lower appellate authority. The case involved a show-cause notice regarding the use of a foreign brand name impacting SSI exemption claimed by the appellants. Various orders were passed by different authorities, leading to appeals and counter-appeals. The Tribunal ultimately set aside the order passed by the Commissioner (Appeals) on technical grounds, emphasizing the importance of correct form submission. The department challenged subsequent refund claims and a preventive show-cause notice was issued for recovery of an erroneous refund. The Dy. Commissioner adjudicated on contradictory rulings by higher authorities, emphasizing the need for revenue officers to follow appellate decisions. The Commissioner (Appeals) later passed an order against the appellants, who claimed lack of notice receipt and awareness of ongoing proceedings.

2. The rejection of the refund claim as time-barred was challenged by the appellants before the Commissioner (Appeals), who remanded the matter for fresh consideration, leading to the claim being sanctioned. The revenue filed an appeal against this sanction, which was allowed by the Commissioner (Appeals) based on the unauthorized use of the foreign brand name. The show-cause notice for recovery of the erroneous refund was adjudicated by the Dy. Commissioner, who emphasized the binding nature of higher appellate authorities' decisions on revenue officers.

3. The adjudication of the show-cause notice for recovery of the erroneous refund involved considerations of contradictory rulings by higher appellate authorities and the importance of following judicial discipline. The Dy. Commissioner ultimately decided to drop the proceedings against the appellants based on the Supreme Court's judgment emphasizing adherence to higher authorities' orders.

4. The case highlighted the significance of judicial discipline in following decisions of higher appellate authorities to avoid undue harassment to taxpayers and ensure the proper administration of tax laws. The Dy. Commissioner's decision to follow the order of the CEGAT in dropping proceedings against the appellants exemplified the application of this principle.

5. The appellants raised concerns about not receiving notice of hearings and being unaware of ongoing proceedings before the Commissioner (Appeals). This lack of communication due to a change in the appellants' registered office address led to challenges regarding the validity of the impugned order passed by the Commissioner (Appeals) on grounds other than the original order's validity. The Tribunal ultimately set aside the impugned order due to the lower appellate authority's failure to consider the finality of previous decisions and the necessity of following judicial discipline.