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TMI Blog2011 (5) TMI 694X X X X Extracts X X X X X X X X Extracts X X X X ..... and setting aside OIA No. COMMR(A)/537/VDR-I/2003 dated 21-11-200 (Annexure-'F') by holding and declaring that the proceedings initiated against the petitioner company vide 29 show cause notices on which OIO No. 56 to 84/MP/2001/Dem dated 27-3-2001 (Annexure-'D') was passed, stand terminated completely and permanently;" 2. The petitioner No. 1-Company (hereinafter to be referred to as 'the business of manufacturing of medicaments. The Excise Department raised a dispute about valuation of goods manufactured by the petitioner-company and sold to a partnership firm of Mumbai viz. Messrs Pharma Chem Distributors. It was the case of the department that the petitioner-company was not entitled to use logo of 'P/B' and claim exemption as a small scale industry because the said logo belonged to a company of Mumbai, namely, Messrs P&B Laboratories Private Limited. By an order-in-original dated 26-9-2001, the Commissioner of Central Excise, Ahmedabad confirmed a total demand of Rs. 79,47,034/- against the petitioner-company in relation to the above referred two issues. The demand was confirmed for the extended period of limitation, that is, for the period from 1-5-1985 to 31-12-1989, al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessable value on the basis of the price charged by Messrs Pharma Chem Distributors treating it as a related person of the petitioner-company. It is the case of the petitioner that the dispute of the correct assessable value was pending before the Commissioner of Central Excise at that point of time, the Assistant Commissioner did not consider it necessary to keep the adjudication of the 29 show cause notices pending and passed the above referred order confirming the amount of duty of Rs. 2,09,99,772/- and imposing penalty of Rs. 25 lakhs on the petitioner-company. 6. After the above referred order dated 27-3-2001 came to be passed by the Assistant Commissioner, the Commissioner passed order-in-original dated 28-3-2001, accepting the calculations submitted by the petitioners and holding that against the total duty demand of Rs. 79,67,267/-, actual demand that could be confirmed was only Rs. 18,80,876/-. 7. After the above referred proceedings were over, the Supreme Court, as noted hereinabove, allowed the appeal of the petitioner-company by a judgment dated 19-2-2003 setting aside the order of the Tribunal by which it had held that the petitioner-company was not enti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emanding any duties from it. According to the learned advocate, the Supreme Court has allowed the appeal by setting aside the order of the Tribunal under challenge, and thus, the order of the Tribunal stands set aside without any qualifications or conditions and as such no part of the order of the Tribunal is upheld or sustained by the Supreme Court while allowing the appeal preferred by the petitioners. It was accordingly urged that the Commissioner (Appeals) therefore, had no alternative but to allow the petitioners' appeal by setting aside the order impugned before him and that the order of the Commissioner remitting the case back for re-quantification although the whole basis of the proceedings against the petitioner-company had disappeared, is without any basis. 11. The learned advocate, in support of his submissions, placed reliance upon the decision of the Supreme Court in the case of Chandi Prasad v. Jagdish Prasad, (2004) 8 SCC 724 for the proposition that when an appeal is prescribed under a statute and the appellate forum is invoked and entertained, for all intent and purport, the suit continues. When a higher forum entertains an appeal and passes an order on merit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appeal preferred by the petitioners. It was submitted that insofar as the question as regards related person is concerned, the Supreme Court had taken note of the fact that on the question as to whether Messrs Pharma Chem Distributors was a related person, the same had been when the classification was filed, when the first show cause notice was issued in 1985 and also at the stage when the second and the third show cause notices were issued in 1988. At all these stages, the necessary material was before the authorities and they had then taken the view that Messrs Pharma Chem Distributors was not a related person. It was submitted that merely because no specific findings have been recorded by the Supreme Court in relation to the said issue, it cannot be said that the issue has not been decided by the Supreme Court inasmuch as the said issue was very much before the Supreme Court and was subjected to judicial scrutiny and as such once the order of the Tribunal has been set aside by the Supreme Court, the doctrine of merger would be attracted and the respondents are estopped from raising the issue as regards the question whether Messrs Pharma Chem Distributors was a related perso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibutors being related person. That if the Revenue so desired they could have sought clarification from the Supreme Court on the question of related person. However, once the order of the Tribunal had been set aside by the Supreme Court, it is not permissible for the respondents to place reliance on any part of the said order and that as such the twenty-nine show cause notices and adjudication thereof have no legs to stand as the same are based on the order of the Tribunal. According to the learned counsel the impugned order of the Commissioner (Appeals) is without jurisdiction as he could not have relied upon the order of the Tribunal which had already been set aside by the Supreme Court. It was submitted that in the aforesaid premises the Commissioner (Appeals) could not have remitted the matter for calculations as the order of the Supreme Court decides all the issues in favour of the petitioners. Moreover, while sending back the matter, the Commissioner (Appeals) has reduced the penalty whereas in the facts and circumstances of the case there was no justification for upholding any penalty. In conclusion it was submitted that in the present case, in the light of the decision of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regards related person which has not been discussed by the Supreme Court while setting aside the order of the Tribunal. The respondents were, therefore, justified in placing reliance on the same and as such there is no warrant for any intervention by this Court. 16. From the facts noted hereinabove, it is apparent that there was a dispute as regards the valuation of the goods manufactured by the petitioner-company and sold to a partnership firm of Mumbai, Messrs Pharma Chem Distributors. The first ground raised by the department was that the distributor of the petitioner is a related person, therefore there had been short levy of duty; and the second ground was that after insertion of para 7 in Notification No. 175/86-C.E., the petitioner-company was not entitled to exemption as a small scale industry as the petitioner and M/s. P & B Laboratories Ltd., had been using the logo of "P/B". - By the order-in-original dated 26-9-1991 the total demand of Rs. 79,47,034/- came to be confirmed against the petitioner-company in respect of the above referred two issues. The demand also came to be confirmed for the extended period of limitation, that is, for the period from 1-5-1985 to 31 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the appellant was estopped from raising the issue, which was already considered earlier, at a subsequent point of time. Adverting to the facts of the present case, as noticed hereinabove, against the order of the Tribunal, the petitioners had preferred a statutory appeal before the Supreme Court under Section 35L of the Act. The Supreme Court in exercise of appellate jurisdiction, wherein the order of the Tribunal was subjected to judicial scrutiny, has set aside the entire order of the Tribunal. In the circumstances, the doctrine of merger would be squarely attracted in the facts of the present case and as such it is not permissible for the department to now raise the contention that part of the order of the Tribunal still survives and can be relied upon by the department. 17. A perusal of the impugned order passed by the Commissioner (Appeals) clearly shows that even though the aforesaid decision of the Supreme Court has been pointed out to the Commissioner (Appeals), he has construed the said decision as a decision holding that the petitioner-company is eligible for SSI benefit despite the fact that they had used logo 'P/B'. He has further observed that the Supreme Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant therein had been set aside by filing a writ petition in the High Court and then Special Leave Petition in the Supreme Court had been rejected, the court held that there was no justification for not restoring the original seniority to the appellant before it and assigning seniority from a subsequent date. The court held that once the expulsion order was set aside it had no existence in the eye of law and could not be taken notice of for depriving the appellant of his original seniority. 19. Examining the facts of the present case in the light of the aforesaid decisions, once the order passed by the Tribunal was set aside by the Supreme Court, it had no existence in the eye of law and could not be taken notice of by the respondents for the purpose of holding that Messrs Pharma Chem Distributors was a related person. In the light of the decision of the Supreme Court, all the issues which were subject matter of appeal before the Tribunal, had attained finality and as such it is not permissible for the department to thereafter reopen any of such issues against the petitioners herein, the same having attained finality by the decision of the Supreme Court. In the circumstance ..... X X X X Extracts X X X X X X X X Extracts X X X X
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