2013 (2) TMI 140 - HC - Central Excise

Modvat Credit - Tribunal decided the issue in favour of assessee after relying upon the judgement CCE Chandigarh Vs. A.B.Tools Ltd. 1994 (2) TMI 78 - CEGAT, NEW DELHI which is based on Calcutta High Court s judgement of Singh Alloys & Steel ltd. Vs. ACCE 1993 (1) TMI 97 - HIGH COURT AT CALCUTTA - revenue questioned on High court decision as it was under challenge before the Divisions Bench - Held that - As after several efforts and after seeking instruction from the Department revenue could not bring to notice that the judgement of the Calcutta High Court of Singh Alloys & Steel ltd. has been reversed or the order of the Larger Bench of the Tribunal in the case of A.B.Tools Ltd. has been reversed. Thus no fault can be found out in the judgement rendered by the Tribunal and, therefore, this Tax Case is decided accordingly and it is held that if the Tribunal decides the issue following Larger Bench decision based upon the High Court decision, then the Tribunal has not only done it rightly but was bound to do accordingly - in favour of assessee.

Summary

Issues:
Interpretation of conflicting judgments from different courts regarding a tax case.

Analysis:
The judgment in question pertains to a Tax Case where the appellate Tribunal ruled in favor of the assessee based on a judgment from the Larger Bench of the Tribunal, which itself relied on a judgment from the Calcutta High Court. The Revenue challenged this decision, arguing that the issue was still pending before the Division Bench of the Calcutta High Court and had not attained finality. However, the Revenue failed to provide any information indicating that the Calcutta High Court's judgment had been reversed or that the Larger Bench's order had been overturned. The court noted that if a decision has been made based on settled legal positions, as in this case where the Tribunal followed the Larger Bench decision supported by the High Court judgment, then the Tribunal has acted correctly and was obligated to do so.

The court emphasized that when the Tribunal decides an issue in line with a Larger Bench decision supported by a High Court judgment, it is not only a valid approach but a necessary one. Therefore, in the absence of any new information or reversals of previous judgments, the court found no fault in the Tribunal's decision and upheld the ruling in favor of the assessee. Consequently, the Tax Case was dismissed based on the legal position established by the Larger Bench of the Tribunal and the relevant High Court judgment.

In conclusion, the judgment highlights the importance of consistency in legal decisions, especially when relying on precedents set by higher benches or courts. It underscores the significance of following established legal principles and decisions to ensure uniformity and predictability in the application of law.