2014 (9) TMI 446 - HC - Central Excise

Review petition - Merger of appeals - Held that - In the case of Pearl Drinks Ltd. 2010 (7) TMI 10 - SUPREME COURT OF INDIA , the Apex Court did not opine that the doctrine of merger does not apply. What had happened in that case was that the assessee s appeal, which was heard and disposed of by the Tribunal, concerned only two out of the eight heads. Whereas the admissibility of the deduction in respect of the balance six heads was questioned in an independent appeal filed by the Department. It is in these circumstances that Their Lordships held that the order disposing of the appeal of the assessee could not preclude the hearing of the appeal filed by the Department. That situation was altogether different. original order dated June 4, 2010 against which the review was sought, was no longer in force after the appellate order was passed on September 21, 2010, issued on September 28, 2010 - Matter remanded back - Decided in favour of assessee.

Summary

Issues:
1. Condonation of delay in preferring the appeal.
2. Application for review of the original order.
3. Doctrine of merger and its applicability.
4. Appeal against the order dated October 27, 2010, and September 21, 2010.
5. Tribunal's decision based on the judgment of the Hon'ble Supreme Court in Pearl Drinks Ltd.
6. Disposal of the appeal and subsequent review application.
7. Tribunal's failure to address the question of condonation of delay.

Analysis:

1. The Court condoned the delay in preferring the appeal after being satisfied with the grounds presented in the petition.

2. The original order was passed on June 4, 2010, which led to the assessee filing an appeal. During the pendency of the appeal, the Department applied for a review of the original order. The review application was dismissed on September 21, 2010. The appeal itself was disposed of on October 27, 2010. The Court noted that the original order merged into the appellate order after its passing.

3. The Revenue appealed against the orders dated October 27, 2010, and September 21, 2010. The Tribunal, based on the judgment in Pearl Drinks Ltd., held that the doctrine of merger does not apply. However, the High Court disagreed, stating that the Tribunal's understanding was incorrect.

4. The High Court clarified that in the case before them, the original order against which the review was sought was no longer valid after the appellate order was passed. The Court held that all points related to the original order became res judicata after the appellate order, making it unreviewable. The Tribunal was directed to consider the question of condonation of delay and hear the appeal against the order dated September 21, 2010, on its merits.

5. The High Court set aside the order under challenge and remanded the matter back to the Tribunal for further consideration on the condonation of delay and the appeal against the order dated September 21, 2010. All connected applications were disposed of accordingly.