2017 (12) TMI 80 - AT - Central Excise

Scope of Remand proceedings - Doctrine of merger - only point on which the Revenue is aggrieved by the impugned order is that when the remand direction was given by the Tribunal, the Commissioner should have decided the case afresh by not restricting to the dispute of ₹ 77.61 lakhs which was agitated by the respondent in their appeal resulting in the remand direction - Held that - Admittedly, the said final order dealt with the grievance of the appellant relating to a limited issue of eligibility or otherwise of Cenvat credit of ₹ 77.61 lakhs. No other point or dispute relating to other issues were ever raised or discussed in the final order. There is no ground for either parties to present their grievance on any other mater. In such situation, it is very clear the Tribunal can only act within the appeal proceedings and set aside or modify or change that portion of the order which appellant is aggrieved of. We do not find any merit in the submission that in such restricted remand the Original Authority has the power to proceed and examine all issues raised the show cause notice afresh to arrive at the liability or otherwise of all credit which is much beyond ₹ 77.61 lakhs. That will not be legally an admissible proposition. Even examining the doctrine of merger, we note that the Tribunal order can merge only on the issue which was examined and decided and cannot go beyond the scope. Appeal dismissed - decided against Revenue.

Summary

Issues:
Appeal against order-in-original, remand direction by Tribunal, scope of examination by Original Authority, doctrine of merger.

Analysis:
The present appeal before the Appellate Tribunal CESTAT NEW DELHI was filed against an order-in-original dated 06/05/2014, marking the second round of litigation. The original order was initially passed on 23/11/2011, and both parties challenged it on different grounds. The Departmental appeal was dismissed on 21/12/2016 by the Tribunal. The appeal by the assessee was remanded to the Original Authority regarding a duty demand of ?77,61,426, and the Adjudicating Authority issued a fresh order as per the Tribunal's direction. The appeal by the Revenue was based on the contention that the Original Authority should have examined the entire issue raised in the show cause notice, not just the amount of ?77,61,426. The respondent contested the disallowance of credit and raised concerns about the violation of natural justice. Both parties elaborated on their grounds of appeal and cross objection.

Upon hearing both sides, the Tribunal noted that the Revenue's grievance was limited to the fact that the Commissioner should have decided the case afresh without restricting it to the disputed amount. The Tribunal's final order specified a limited issue regarding Cenvat credit of ?77.61 lakhs. The Tribunal clarified that it could only address issues raised within the appeal proceedings and could not extend beyond the scope of the appeal. The Tribunal also discussed the doctrine of merger, citing a Supreme Court decision, which emphasized that the Tribunal's order could only merge on the issues examined and decided. As the Revenue's appeal was solely based on this legal issue and no other grounds were raised, the Tribunal dismissed the Revenue's appeal and disposed of the Cross Objection.

In conclusion, the Tribunal upheld the principle that the scope of examination by the Original Authority was limited to the issues raised in the appeal proceedings, as per the Tribunal's remand direction. The doctrine of merger was applied to ensure that the Tribunal's decision was confined to the issues under consideration. The judgment emphasized the importance of addressing specific legal grounds raised in appeals and not expanding beyond the scope of the original dispute.