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2025 (3) TMI 778 - AT - Central ExciseReview of refund claim which was already granted - Determination of physician samples - Rule 4 or Rule 8 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules 2000 - rejection of refund claim partly as being time barred and rejection of balance amount stating that valuation of physical samples were to be determined under Rule 4 of the Valuation Rules 2000 - applicability of CBEC Circular dated 25.4.2005 - HELD THAT - This is a case where the appellant initiated a refund claim based on Boards Circular. It was for the department to examine the claim from all angles on fact and law and issue a SCN if they choose to reject the claim. In doing so they were obliged to bring out all the objections that they had in sanctioning the claim so that the noticee could effectively respond to the allegations being made at one go. Piecemeal issue of SCN or adjudication cannot be done. It is not the departments case that the second round of appeal was caused by the Lower Authority going beyond the remit of the First Appellate Authority s order. The Hon ble Supreme Court in Gangai Vinayagar Temple Vs Meenakashi Ammal 2009 (9) TMI 1095 - SUPREME COURT held that res judicata is an ancient doctrine of universal application and permeates every civilised system of jurisprudence. This doctrine encapsulates the basic principles in all judicial systems which provide that an earlier adjudication is conclusive on the same subject-matter between the same parties. The issue could not have been reopened again in an appeal by the same Authority nor could fresh issues which were omitted to be alleged in the first round of appeal be added in the second round multiplying the litigation. A decision or order made by an Authority of competent jurisdiction is final unless it is modified or reversed in appeal. The well settled principles of res judicata debars an Authority from exercising its jurisdiction to determine the lis if it has attained finality between the parties. This is based on public policy in order to put an end to litigation. Further no man should be vexed twice for the same cause. Revenue should not have reviewed and taken up the refund orders in appeal when they did not challenge the order of the First Appellate Authority which partly allowed the appeal leading to the sanction of the refund - The binding nature of the first appellate order on the parties to the litigation would endure as it had not been appealed against even in circumstances where the basis of which it was made is subsequently held to be an incorrect application of the relevant tax law. To do otherwise is in breach of judicial discipline and is destructive of the basic principles of the administration of justice. Conclusion - i) The department s attempt to reopen settled issues without challenging the first appellate order was procedurally improper and legally unsound. ii) The Tribunal set aside the impugned order allowing the appeals and granting the appellant eligibility for consequential relief. Appeal allowed.
1. ISSUES PRESENTED and CONSIDERED
The core legal questions considered in this judgment include:
2. ISSUE-WISE DETAILED ANALYSIS Valuation Method for Physician Samples Relevant Legal Framework and Precedents: The valuation of physician samples was initially guided by CBEC Circular No. 643/34/2002 CX, which suggested valuation at 100%/115% of the cost of production under Rule 8. However, a subsequent Circular dated 25.4.2005 suggested valuation under Rule 4, which was argued to apply retrospectively. Court's Interpretation and Reasoning: The Tribunal noted that the department's appeal was based on the argument that the valuation should be on a comparable price basis under Rule 4, as per the 2005 Circular. However, this issue had already been addressed in the first appellate order, which favored the appellant's position. Application of Law to Facts: The Tribunal emphasized that the first appellate order, which allowed the refund based on Rule 8 valuation, was not challenged by the department, making it final and binding. Treatment of Competing Arguments: The Tribunal rejected the department's argument for retrospective application of the 2005 Circular, emphasizing the finality of the first appellate order. Doctrine of Unjust Enrichment Relevant Legal Framework and Precedents: The doctrine of unjust enrichment, as established in the Solar Pesticides case, was considered to determine if the duty burden was passed on to consumers. Application of Law to Facts: The Tribunal noted that the adjudicating authority had already examined and concluded that unjust enrichment did not apply as there were no sales, and this finding was not contested in the first appeal. Time-Barred Refund Claims Application of Law to Facts: The Tribunal observed that the issue of time-barred claims was not a valid ground for the department's second appeal, as it was not raised in the initial proceedings. Principle of Res Judicata Relevant Legal Framework and Precedents: The principle of res judicata, as articulated in Gangai Vinayagar Temple Vs Meenakashi Ammal, prevents re-litigation of issues that have been conclusively settled. Court's Interpretation and Reasoning: The Tribunal underscored the finality of the first appellate order, which the department failed to challenge, thus barring further litigation on the same issues. 3. SIGNIFICANT HOLDINGS Preserve Verbatim Quotes of Crucial Legal Reasoning: "The first appellate order had become final and binding on the parties, and the respondent could not question it in any way." Core Principles Established: The Tribunal reinforced the principle that once an appellate order is not challenged, it becomes final and binding, precluding further litigation on the same grounds. Additionally, it highlighted the importance of adhering to procedural rules and the doctrine of res judicata to prevent unnecessary litigation. Final Determinations on Each Issue:
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