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2008 (12) TMI 45 - HC - Central ExciseApplicability of the doctrine of merger depends on the nature of the Appellate or revisional jurisdiction - . The scope of the statutory provisions conferring the appellate or revisional jurisdiction must be first considered - doctrine of merger is not a doctrine of rigid and universal application. Merely because there are two orders one by the inferior authority and the other by a superior authority passed in an appeal or revision it cannot be said that there is a merger of the two orders
Issues Involved:
1. Application of the doctrine of merger. 2. Jurisdiction of the Commissioner under Section 35E. 3. Jurisdiction of the Appellate Tribunal under Section 35B. 4. Distinction between appeals and cross-objections. Detailed Analysis: Issue 1: Application of the Doctrine of Merger The doctrine of merger is a common law principle that implies when a lower court's decision is reviewed by a higher court, the lower court's decision merges into the higher court's decision. In these cases, the primary question was whether the doctrine of merger applied when the CESTAT dismissed appeals based on the doctrine of merger, relying on the precedent set in L.M.L. Ltd. (Scooter Division) 2002 (143) ELT 431 (Tri-LB). In Central Excise Appeal No.175 of 2006, the CESTAT dismissed the appeal by applying the doctrine of merger. The High Court noted that the doctrine of merger is not of universal application and depends on the nature of the appellate or revisional jurisdiction and the issues involved. The Court held that the doctrine did not apply as the issue of interest under Section 11AB was not part of the appeal decided by the Commissioner (Appeals). Similarly, in Central Excise Appeal No.262 of 2006, the CESTAT applied the doctrine of merger and dismissed the appeal. The High Court reiterated that the doctrine of merger would not apply as the appeal before the Commissioner (Appeals) only addressed the penalty under Rules 173Q and 209A, and not the duty and interest issues. In Central Excise Appeal No.269 of 2006, the CESTAT again applied the doctrine of merger. The High Court found that the doctrine did not apply as the appeal before the Commissioner (Appeals) was limited to the marketability of the product "capping cement," and the issue of time-barred show cause notice was not addressed. Issue 2: Jurisdiction of the Commissioner under Section 35E Section 35E confers suo motu power on the Commissioner to examine the legality of orders passed by subordinate authorities. The High Court clarified that the Commissioner could direct filing of appeals on points not raised in the original appeal. This was particularly relevant in Central Excise Appeal No.175 of 2006, where the Commissioner directed an appeal on the issue of interest, which was not part of the original appeal. Issue 3: Jurisdiction of the Appellate Tribunal under Section 35B Section 35B allows any person aggrieved by an order to appeal to the Appellate Tribunal. The High Court emphasized that the Tribunal's jurisdiction is limited to the issues raised in the appeal and any cross-objections filed. In Central Excise Appeal No.262 of 2006, the Tribunal's jurisdiction was limited to the penalty issue, and it could not address the duty and interest issues without cross-objections. Issue 4: Distinction between Appeals and Cross-Objections The High Court noted that Section 35B(4) allows respondents to file cross-objections within 45 days of receiving notice of an appeal. This provision ensures that all issues can be addressed in a single proceeding. However, if no cross-objections are filed, the Tribunal cannot address those issues. This was a key point in Central Excise Appeal No.269 of 2006, where the appeal was limited to the marketability issue, and the time-barred show cause notice was not addressed due to the absence of cross-objections. Conclusion: The High Court set aside the CESTAT orders in all three appeals, holding that the doctrine of merger did not apply as the appeals before the Commissioner (Appeals) and the Tribunal did not address all issues. The matters were remanded to the CESTAT for re-determination on merits. The Court emphasized that the doctrine of merger depends on the nature of the appellate jurisdiction and the specific issues involved in each case.
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