2012 (5) TMI 141 - HC - Central Excise

Notice to make payment of the differential Central Excise duty - Held that - Tribunal had adjudicated the matter in its favour which order has not been set aside so far - as per Section 35K (1)the Tribunal after the decision by the High Court or the Supreme Court is required to pass order to dispose of the case in conformity with such judgment unless, such an order is passed, the earlier order passed by the Tribunal remains in existence - no such order has been passed by the Tribunal so far in terms of the judgment delivered by this Court - open to the revenue to act against the petitioner as and when the order is passed by the Tribunal in terms of section 35K (1) - in favour of assessee.

Summary

Issues:
1. Quashing of notices for payment of differential Central Excise duty.
2. Interpretation of Section 35K(1) of the Central Excise Act, 1944.

Issue 1: Quashing of notices for payment of differential Central Excise duty:
The petition sought to quash notices dated 30.11.2011 and 23.2.2012, directing the petitioner-firm to pay differential Central Excise duty for the period from 1.7.1999 to 31.3.2000. The petitioner argued that the order dated 9.10.2000, in their favor, had not been varied, and therefore, the department could not claim payment based on the subsequent decision in the reference petition. The petitioner contended that unless the Tribunal passed an order in line with the High Court's judgment in GCR No.2 of 2003 dated 26.8.2011, no recovery could be made from them. The revenue opposed the prayer, stating that the notices were issued to protect revenue interests following an adverse decision against the assessee-petitioner.

Issue 2: Interpretation of Section 35K(1) of the Central Excise Act, 1944:
The Court analyzed Section 35K(1) of the Act, which mandates that the Tribunal, after a decision by the High Court, must pass an order conforming to the judgment. In this case, the Tribunal had not issued any such order in accordance with the High Court's decision in GCR No.2 of 2003 dated 26.8.2011. As a result, the earlier order in favor of the petitioner remained valid. The Court emphasized that without the Tribunal passing an order in compliance with the High Court's judgment, the notices issued by respondent No.3 for payment of differential duty could not be legally upheld. Consequently, the petition was allowed, giving the revenue the opportunity to take action once the Tribunal passed an order as per Section 35K(1) of the Act.

This judgment highlights the importance of procedural compliance and the necessity for tribunals to align their decisions with higher court judgments to enforce recovery actions lawfully.