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TMI Blog2018 (11) TMI 1478X X X X Extracts X X X X X X X X Extracts X X X X ..... the Doctrine of Merger, which is not applicable to the facts of this case. Tribunal has not stated precisely, as to how, the Doctrine of Merger, is applicable in this case. The Tribunal has not stated, as to which order has merged into which order and as to why the appeal before it was allowed by applying the Doctrine of Merger - The Doctrine of Merger would not apply, even if the order dated 31/3/2004, passed by the Commissioner (Appeals), in order in Appeal No.269 of 2004 was not challenged. Reliance of the respondent on the judgment of the Hon'ble Supreme Court in STATE OF PUNJAB OTHERS Vs. KRISHAN NIWAS [1997 (3) TMI 622 - SUPREME COURT] is of no assistance and are distinguishable. Appeal allowed. - C.M.A.No.986 of 2018 - - - Dated:- 26-10-2018 - Mr. Justice S. Manikumar And Mr. Justice Subramonium Prasad For the Appellant : Mr.V.Sundareswaran For the Respondent : Mr.Akhil Suresh JUDGMENT SUBRAMONIUM PRASAD, J. The instant appeal is directed against the order dated 30.09.2016 of the CESTAT, Chennai, in final order No.41693 of 2016. 2. The Respondent M/s.Hindustan Petroleum Corporation Limited imports systems hardwares and software v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Corporation reported in 143 ELT 482. This order was not further challenged. 6. When the matter stood thus the order, dated 24/04/2003, passed by the CEGAT in final order No.291/2003, was challenged by the Revenue, by filing Referred Petition No.02/2012, in the High Court of Madras. The same was dismissed by the order dated 04.07.2013 on the ground that no question of law arose for consideration. The revenue thereafter, filed a Special Leave Petition before the Hon'ble Supreme Court of India against the order dated 04.07.2013, passed by this Court. The Special Leave Petition was withdrawn by the appellant on 7/2/2014 with liberty to file a review against the order dated 04.07.2013. The order of the Hon'ble Supreme Court reads as under:- Learned A.S.G appearing for the petitioner-revenue, on instructions, seeks permission of this Court to withdraw the Special Leave Petition with liberty to file an appropriate Review Petition before the High Court. Permission sought for is granted. The Special Leave Petition is disposed of as withdrawn. If, for any reason, the petitioner does not succeed before the High Court, he is at liberty to question the main order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The decision of the Apex Court in Karnataka Power Corporation reported in 143 ELT 482 is not applicable to the facts of the case, since in Karnataka power corporation, the appeal was filed contesting the classification. In the present case the respondent had failed to file an appeal challenging the assessment of imported goods under the Bill off Entry dated 02.05.2000. 5. Unless the assessment order is set-aside in a manner known to law, the adjudicating authorities are not empowered under the Taxing enactment to refund the amount of tax paid. 6. The judgment of the Apex Court in Collector of Central Excise, Kanpur Vs. flock India Pvt Ltd {2000 (12) ELT 285 (SC)} and Priya Blue Industries Ltd Vs. Commissioner of Customs (Preventive) {2004 (172) ELT 145 (SC), would apply to the present case. 11. The learned counsel for the respondent would submit that, their case is clearly distinguishable from the facts of Flock India cited supra for the following reasons:- a. There exist no law at the relevant point of time which directed the respondents to separately challenge the assessment order. To the contrary, the common practice followed in the trade then was to file a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t turn around and challenge the order of the Tribunal. 12. The questions which arise for consideration are:- a. Whether the appellant could question the classification of the case in a refund application, without challenging the assessment order. In other words, can the refund application go behind an assessment, which has attained finality. b. Whether the revenue could pursue the R.C.P. after participating in the proceedings consequent to the remand order, dated 24/4/2003, passed by the CESTAT. c. Whether the Tribunal could apply the Doctrine of Merger for dismissing the appeal of the revenue. 13. The Hon'ble Supreme Court, in COLLECTOR OF CENTRAL EXCISE, KANPUR Vs. FLOCK (INDIA) PVT. LTD {2000 (120) ELT 285 (SC), has held that when an order which is appealable, under the Central Excise Act, is not challenged, then, the order is not liable to be questioned and the matter is not to be reopened in a proceeding, for refund. Paragraph Nos.8 to 10 of the said judgment reads as under:- 8. From the aforementioned provisions of the Act the position is clear that any order passed by an authority under the Act is appealable to the Collector (Appeals) and a furthe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he provision indicates the importance attached to an order of the appellate or revisional authority under the Act, therefore, an order which is appealable under the Act is not challenged then the order is not liable to be questioned and the matter is not to be reopened in a proceeding for refund which if we may term it so is in the nature of execution of a decree/order. In the case at hand, it was specifically mentioned in the order of the Assistant Collector that the assessee may file appeal against the order before the Collector (Appeals) if so advised. (emphasis supplied). 14. The Hon'ble Supreme Court in Priya Blue Industries Ltd Vs. Commissioner of Customs (Preventive) {2004 (172) ELT 145 (SC), followed the judgment of the COLLECTOR OF CENTRAL EXCISE, KANPUR Vs. FLOCK (INDIA) PVT. LTD {2000 (120) ELT 285 (SC) . Paragraph 6 of the judgment in Priya Blue Industries Ltd's case, reads as under:- We are unable to accept this submission. Just such a contention has been negatived by this Court in Flock (India)'s case (supra). Once an order of assessment is passed the duty would be payable as per that order. Unless that order of assessment has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant Collector of Customs declined their application. The appellants filed an appeal before the Collector (Appeals). He dismissed the appeal; he found that at the appellate stage the appellants had changed their stand regarding the classification of the epoxy coils. The order of the Collector (Appeals) was challenged by the appellants before the Tribunal. In their memo of appeal, they impugned the aforesaid finding of the Collector (Appeals) and added that he had failed to notice that the appellants had amended their stand on classification as early as on 27th August, 1994/25th August, 1994 and copies of those letters were annexed to the memos of appeal.Even so, the Tribunal stated : This raises a question of law as to 16 whether, when a new classification is suggested before an appellate authority, the consequential relief flowing out of it can become time-barred, if the original issue pertained to a refund claim on other grounds? The Tribunal considered this question and concluded against the appellants. 2. It is plain from what has been stated above that the Tribunal has misdirected itself. There is no question but that the appellants had sought amendment before the Assi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... {2004 (172) ELT 145 (SC). The reference petition No.2/12 therefore has to be allowed and the order dated 24/4/2003, passed by the Customs Excise and Gold (Control) Appellate Tribunal, South Zonal Bench, Chennai, in FlO.No.291/2003, has to be set aside. 18. Tribunal by the impugned order, has set aside the order dated 18/7/2006 of the Commissioner (Appeals). The order of the Commissioner (Appeals) reads as under:- The facts of this case is squarely applicable to the law set out by the Apex Court on the issue of the refund claim. The order of assessment made in the Bill of Entry No.216574 dated 2/5/2000 stands operative even to this day as it has not been set aside by an authority under the Act. It follows from the above that the question of refund of duty based on the existing order of assessment of the said Bill of Entry, as per the law in force, does not arise. Accordingly, I pass the following order: O R D E R The refund claim of ₹ 84,06,409/- made by HPCL through their claim dated 1/11/2000 is rejected under Section 27 of Customs Act, 1962. 19. As stated earlier, the appellate authority in its order, dated 18/7/2006, upheld the order of the original a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te authority, dated 30/12/2000 and 27/9/2001, 21 had merged with the order of Tribunal. The Tribunal, in its order dated 24.04.2003, has remanded the matter for fresh adjudication and after remand, the authorities once again applied the judgment of the Apex Court in FLOCK (INDIA) PVT. LTD reported in {2000 (120) ELT 285 (SC). 23. Doctrine of Merger has been explained by t he Hon'ble Supreme Court in Kunhayammed v. State of Kerala, (2000) 6 SCC 359, wherein it has been observed as under: 7. The doctrine of merger is neither a doctrine of constitutional law nor a doctrine statutorily recognised. It is a common law doctrine founded on principles of propriety in the hierarchy of justice delivery system. On more occasions than one this Court had an opportunity of dealing with the doctrine of merger. It would be advisable to trace and set out the judicial opinion of this Court as it has progressed through the times. 8. In CIT v. AmritlalBhogilal and Co.AIR 1958 SC 868, this Court held: There can be no doubt that, if an appeal is provided against an order passed by a tribunal, the decision of the appellate authority is the operative decision in law. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ority was subjected to a remedy available under the law before a superior forum then, though the decree or order under challenge continues to be effective and binding, nevertheless its finality is put in jeopardy. Once the superior court has disposed of the lis before it either way - whether the decree or order under appeal is set aside or modified or simply confirmed, it is the decree or order of the superior court, tribunal or authority which is the final, binding and operative decree or order wherein merges the decree or order passed by the court, tribunal or the authority below. However, the 24 doctrine is not of universal or unlimited application. The nature of jurisdiction exercised by the superior forum and the content or subject-matter of challenge laid or which could have been laid shall have to be kept in view. Stage of SLP and post-leave stage. 24. Similarly in Amba Bai v. Gopal, (2001) 5 SCC 570 , the Hon'ble Supreme Court observed as under: 10. The learned Single Judge of the High Court in the impugned order held that the order passed in the first appellate decree merged into the order passed in the second appeal and hence there is no executable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, nevertheless the Division Bench decision of the Madras High Court stood merged in the decision of the Supreme Court according to the doctrine of merger and, therefore, it was no more open for the Full Bench to examine and consider the correctness of the law laid down by the Division Bench in M. Varadaraja Pillai case which, the Full Bench thought, would be deemed to have been affirmed by the Supreme Court in view of dismissal of the appeals thereagainst. 10. Firstly, the doctrine of merger. Though loosely an expression merger of judgment, order or decision of a court or forum into the judgment, order or decision of a superior forum is often employed, as a general rule the judgment or order having been dealt with by a superior forum and having resulted in confirmation, reversal or modification, what merges is the operative part i.e. the mandate or decree issued by the court which may have been expressed in a positive or negative form. For example, take a case where the subordinate forum passes an order and the same, having been dealt with by a superior forum, is confirmed for reasons different from the one assigned by the subordinate forum, what would merge in the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt as regards the statement of law or the reasons recorded by the Division Bench of the High Court in its impugned order. The contents of the order of this Court clearly reveal that neither the merits of the order of the High Court nor the reasons recorded therein nor the law laid down thereby were gone into nor could they have been gone into . 12. Thirdly, as we have already indicated, in the present round of litigation, the decision in M. Varadaraja Pillai case was cited only as a precedent and not as res judicata. The issue ought to have been examined by the Full Bench in the light of Article 141 of the Constitution and not by applying the doctrine of merger. Article 141 speaks of declaration of law by the Supreme Court. For a declaration of law there should be a speech i.e. a speaking order. In Krishena Kumar v. Union of India,[1990] 4 SCC 207, this Court has held that the doctrine of precedents, that is being bound by a previous decision, is limited to the decision itself and as to what is necessarily involved in it. In State of U.P. v. Synthetics and Chemicals Ltd,[1991] 4 SCC 139, R.M. Sahai, J. (vide para 41) dealt with the issue in the light of the rule of su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich was again, only an order of remand. The authorities below were bound to apply the law before allowing the refund application. The authorities below were also duty bound to consider, as to whether the refund application could go behind the assessment order. They were 31 duty bound to follow the judgment of the Hon'ble Apex Court in FLOCK (INDIA) PVT. LTD {2000 (120) ELT 285 (SC), 27. The contention of the respondent that the revenue after participating in a proceeding, pursuant to a remand order, dated 24/4/2003 cannot be permitted to turn around and challenge the matter, cannot be sustained. It is a well accepted principle that there is no estoppel against law. The judgment in COLLECTOR OF CENTRAL EXCISE, KANPUR Vs. FLOCK (INDIA) PVT. LTD {2000 (120) ELT 285 (SC), followed by Priya Blue Industries Ltd., case, would bind the parties. A pure question of law which arises for consideration is, as to whether the question of classification could be gone into at the stage of refund, has been answered against the assessee by the Supreme Court. The fact that revenue has participated, in further proceeding, cannot bind the revenue from raising this contention, at any stage. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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