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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 ..... l still survives and can be relied upon by the department. This High Court in the case of Satellite Engineering Limited v. Assistant Collector of Central Excise (1991 -TMI - 43178 - HIGH COURT OF GUJARAT) as well as in the case of Ramkrishna Wire Works v. Union of India (1994 -TMI - 44175 - HIGH COURT OF GUJARAT) has held that once a decision is reversed and set aside, it is immaterial on which point the decision was reversed because on reversion of the decision, it ceases to be a good decision in the eye of law. In the circumstances, once the decision of the Tribunal had been reversed, the Commissioner (Appeals) could not have placed reliance upon any part of the said decision as the same ceased to be a good decision in the eye of law. - Special Civil Application No. 250 of 2004, - - - Dated:- 2-5-2011 - Harsha Devani and R.M. Chhaya, JJ. Shri Paresh M. Dave, Advocate, for the Petitioner. Shri Gaurang H. Bhatt, Standing Counsel, for the Respondent. [Judgment per : Harsha Devani, J. (Oral)]. This petition under Article 226 of the Constitution of India has been filed with the following substantive prayers : 9. In the above premises, the petitioners most r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioner-company filed an appeal under Section 35L of the Act before the Supreme Court, which came to be registered as Civil Appeal No. 3969 of 1995. 3. The appeal preferred by the petitioners before the Supreme Court against the above referred order of the Tribunal came to be allowed by judgment and order dated 19-2-2003, which is reported in 2003 (153) E.L.T. 14 (S.C.). 4. In the meanwhile, pursuant to the directions issued by the Tribunal in the above referred decision directing the Collector to redetermine the amount due and payable by the petitioner-company, further adjudication took place in that connection and an order-in-original came to be passed by the same amount of Rs. 79,67,267/-. The petitioner-company preferred an appeal against the said order before the Tribunal pursuant to which the petitioner-company was directed to pre-deposit an amount of Rs. 25 lakhs by an order dated 13-5-1998. 5. During the pendency of the aforesaid proceedings, twenty-nine show cause notices came to be issued to the petitioner-company for the period from January, 1990 till June, 2000 on the basis of the order-in-original passed by the Collector of Central Excise, Ahmedabad at th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enefit was held to be available to the petitioner-company and, therefore, the demand confirmed by the Assistant Commissioner without allowing this benefit was illegal and that the value taken in the twenty-nine show cause notices was also incorrect in view of the order of the Commissioner of Central Excise who had accepted the claim for deductions even if it was assumed that Messrs Pharma Chem Distributors was a related person of the petitioner-company. 9. By the impugned order dated 21-11-2003, the Commissioner remitted the case back to the Assistant Commissioner of Central Excise, Anand, to work out the duty of excise at the appropriate rate for the relevant period after considering all the aspects in the said order. Penalty of Rs. 5 lakhs was sustained by reducing the penalty of Rs. 25 lakhs in the original adjudication order. Being aggrieved, the petitioners have filed the present petition seeking the reliefs noted hereinabove. 10. Mr. Paresh Dave, learned advocate appearing on behalf of the petitioners, the proceedings initiated vide twenty-nine show cause notices against the petitioner company was the order of the Collector of Central Excise, which was upheld by the Tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the fact whether the appellate court affirms, modifies or reverses the decree passed by the trial court. Adverting to the facts of the present case it was submitted that the Supreme Court has set aside the entire order of the trial court, in the circumstances, it cannot be construed as if the decision of the Supreme Court operates in two parts viz., for the purpose of the issue as regards related persons the order of the Tribunal would operate and that for the purpose of logo and SSI exemption, the Supreme Court decision would operate. 12. Reliance was placed upon the decision of this High Court in the case of Satellite Engineering Limited v. Assistant Collector of Central Excise, 1992 (58) E.L.T. 503 (Guj.) for the proposition that once a decision is reversed and set aside, it is immaterial on which point the decision is reversed because on reversion of the decision, it ceases to be a good decision in the eye of law. Reliance was also placed upon the decision of this High Court in the case of Ramkrishna Wire Works v. Union of India, 1996 (81) E.L.T. 450 (Guj.) for a similar proposition of law. The decision of the Supreme Court in the case of Pernod Ricard India (P) Ltd. v. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s with the order of the Supreme Court and has no independent existence of its own and as such the Commissioner (Appeals) was not justified in relying on the part of the order of the Tribunal to the extent the same decides against the petitioners on the question of related person. It was submitted that the order of the Tribunal having merged with the order of the Supreme Court, the department cannot raise the issue even in future proceedings. 14. Insofar as the contention raised on behalf of the Revenue that the decision of the Supreme Court qua the related person applies only to the extended period of limitation, the learned advocate invited the attention of the court Special Civil Application No. 16053 of 2003 wherein the court had observed that it was not agreeable to accept the contention of the respondents that it was open to the respondents to recover the amount which was within the normal period of limitation. The court held that it cannot be denied that the Supreme Court had quashed and set aside the order passed by the Tribunal and, therefore, the petitioners were entitled to refund of the entire amount. It was submitted that the aforesaid order of this Court has attained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid issue had not been decided on merits. According to the learned counsel, the Supreme Court has only decided the question as regards use of logo of the manufacturer by third parties as well as the entitlement to small scale industry exemption, whereas nothing has been stated on merits qua the issue as regards Messrs Pharma Chem Distributors being a related person. In the circumstances, the order of the Tribunal to the extent the same held that Messrs Pharma Chem Distributors was a related person has not been disturbed by the Supreme Court and the respondents were, therefore, justified in placing reliance upon the decision of the Tribunal to the said extent. Reliance was placed on the affidavit-in-reply filed on behalf of the respondents wherein it has been stated that the Supreme Court had set aside the Tribunal s order in which the extended period of five years was invoked. But the same cannot be implied for the subsequent period as the demand was issued protective and within time limit. The learned counsel for the respondents urged that the Supreme Court had set aside the order of the Tribunal to the extent the same permitted invocation of the extended period of limitation and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a related person is concerned, the Supreme Court has taken note of the fact that earlier show cause notices had been issued in relation to the said question wherein the department had taken a view in favour of the petitioners. However, subsequently, the case of the department is that Messrs Pharma Chem Distributors is a related person. The Court observed that so far as the assessee is concerned, it has all along been contending that they were not related persons, so, it cannot be said to be guilty of not filling up the declaration in the prescribed proforma indicating related persons. The Court held that it was therefore futile to Chem Distributors being a related person. The Court, accordingly, held that there was no justification for invoking of the proviso to Section 11A of the Act for making the demand for the extended period. Though it is true that there is no specific discussion in respect of the issue regarding Messrs Pharma Chem Distributors being a related person, in the ultimate result, the Supreme Court set aside the order of the Tribunal in toto. Thus, the order of the Tribunal stands merged with the order of the Supreme Court and does not retain any identity of its ow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sale price at the hands of Messrs Pharma Chem Distributors, Mumbai but in arriving at such assessable value, permissible deductions as per law, have to be made. Thus, it is apparent that for the purpose of deciding the issue as regards Messrs Pharma Chem Distributors being a related person, the Commissioner (Appeals) has placed reliance upon the order of the Tribunal as well as the observations made therein, despite the fact that the same stood merged in the order of the Supreme Court and had no independent existence on its own. This High Court in the case of Satellite Engineering Limited v. Assistant Collector of Central Excise (supra) as well as in the case of Ramkrishna Wire Works v. Union of India (supra) has held that once a decision is reversed and set aside, it is immaterial on which point the decision was reversed because on reversion of the decision, it ceases to be a good decision in the eye of law. In the circumstances, once the decision of the Tribunal had been reversed, the Commissioner (Appeals) could not have placed reliance upon any part of the said decision as the same ceased to be a good decision in the eye of law. 18. The Supreme Court in the case of the Govern ..... X X X X Extracts X X X X X X X X Extracts X X X X
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