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TMI Blog2021 (4) TMI 138X X X X Extracts X X X X X X X X Extracts X X X X ..... spondent No. 3 did not elaborate as to why it disagreed with the findings of the Commissioner (Appeals) although, the petitioners submitted their objections in response to the said show cause notice and had also referred to the findings of the Commissioner (Appeals) therein. The respondent No. 3 in its order held that although the appeals before the CESTAT have been withdrawn on the basis of monetary limits for pursuing litigation as prescribed by the Central Board of Excise and Customs, the respondent No. 3 was of the opinion that the CESTAT orders have not binding effect on the adjudication authority to take an particular stand in the matter. There is no discussion in the impugned order as to the effect of the findings of the fact which is reflected in the Commissioner (Appeals) order. Although, the Principle of Res Judicata is strictly not applicable to revenue matters, however, a finding of fact by a higher authority like the Commissioner (Appeals) cannot be ignored. The importance of the requirement of maintaining the judicial discipline by Quasi Judicial Authority like the respondent No. 3, as time and again been stressed upon by the Apex Court in catena of Judgments - In the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Such, actions of the respondent No. 3 cannot be countenanced in view of the law laid down by the Apex Court. Considering the fact that the disagreement by the respondent No. 3 with the findings of the Higher Appellate Authority, namely, the Commissioner (Appeals) is on factual aspect, records of which are available in the Department, the matter is remanded back to the authorities and the respondent authority is directed to pass appropriate orders afresh in the matter after giving adequate opportunities to the petitioner within a period of 3(three) months from today - Petition allowed by way of remand. - HONOURABLE MR. JUSTICE SOUMITRA SAIKIA For the Petitioner : Mr. D. Saraf, Adv. Mr. S. S. Gupta, Adv. For the Respondents : Mr. S. C. Keyal, ASGI. Ms. P. Das, Advocate. JUDGMENT ORDER (CAV) Heard Mr. D. Saraf, learned counsel for the petitioner. Also heard Mr. S. C. Keyal, learned ASGI for the respondents. 2. All these Writ Petitions have been filed by the petitioner challenging the rejection of the Central Excise Duty refund claims of the petitioner as well as the demand of recovery of Central Excise Duty refunds along with interest and penalty imposed. WP(C) No. 2162/2020 has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts manufacturing units were set up before first day of April, 2007 and that it had undergone expansion by way of increase by not less than 25% in fixed capital investments in plant and machinery for the purpose of expansion. It is stated by the petitioner that its capital investment in the unit before expansion was ₹ 38,01,837/- and by way of increased investment towards purchasing of machinery it went up to ₹ 65,58,577/-. The expansion of the unit commenced in 2005 and was completed on 06.06.2007. 4. The petitioner who considered itself eligible for the benefits in terms of Notification No. 20/2007 CE dated 25.04.2007 submitted refund claims in respect of duty paid. The Office of the respondent No. 3, Assistant Commissioner, Central Excise and Service Tax (as it was earlier known) issued three refund orders in the months of May, 2009, June, 2009 and July, 2009. The amounts refunded were ₹ 42,019/- for the month of May, 2009, ₹ 1,83,757/- for the months of June, 2009 and ₹ 31,344/- for the month of July, 2009. Against these refund orders issued by respondent No. 3, the respondent No. 2, namely, the Commissioner, Central Excise and Service Tax (as it wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 30.03.2012 were rejected. Being aggrieved, W.P.(C) No. 2162/2020 and W.P.(C) No. 2189/2020 have been filed putting to challenge the impugned order dated 27.01.2020 passed by the respondent No. 3. Similarly by order dated 18.12.2019, the demand of Excise Duty along with penalty and interest to the tune of ₹ 21,71,123/- in respect of Show Cause Notice dated 03.06.2011 issued by the respondent No. 3 was confirmed, which is the subject matter and which order as well as the Show Cause Notice has been impugned in W.P(C) No. 2107/2020. Excise Duty along with interest and penalty to the tune of ₹ 2,96,512/- which was demanded by Show Cause Notice dated 05.05.2010 was also confirmed by the respondent No. 3 vide order dated 18.12.2019 and which has been impugned in W.P(C) No. 2160/2020. Excise Duty along with interest and penalty amounting to ₹ 10,80,600/- as per Show Cause Notice dated 27.04.2012 was also confirmed by the respondent No. 3 vide order dated 18.12.2019 and which has been impugned in W.P.(C) No. 2161/2020. In respect of the refunds claim for the period of September, 2011 to May, 2012 amounting to ₹ 9,78,552/- which has not been disbursed by the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions raised by the learned counsel for the petitioner and submits that Principle of Res Judicata is not applicable in revenue matters. The learned departmental counsel submits that the Scheme of Central Excise Act and the Rules framed thereunder permits any authority under the Act to re-visit orders earlier passed, in the event it is seen that benefits were wrongly or erroneously granted to any assessee. The learned departmental counsel submits that an affidavit has been filed by the Department in WP(C) No. 2162/2020 and craves leave of this Court to refer and to rely on it in respect of all other writ petitions. The department counsel submits that the respondent No. 3 while adjudicating the matters had specifically referred to the discrepancy noticed by him in respect of the orders passed earlier by which benefits were granted to the petitioner/assessee. 10. Under the circumstances, he submits that there is no infirmity with the order impugned and the same ought not to be interfered with in the present proceedings. The learned department counsel further submits that there are sufficient and adequate statutory alternative remedies available to the petitioner which, however, has no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laims of the petitioner that it satisfies the requirements stipulated under Notification No. 20/2007 CE dated 25.04.2007 to enable the petitioner to claim for the findings of Central Excise Duty paid. The relevant paragraphs regarding the findings of the Commissioner (Appeals) in respect of the fulfillment by the petitioner of the requirements stipulated under the Notification No. 20/2007 dated 25.04.2007 are extracted as under:- 10. I find that the respondents were allowed to function under the Notification No. 20/2007 CE dated 25.04.2007 and there was no dispute whatsoever in getting the refund under the Notification till May, 2009. 11. The allegation of the Department as regards the certificate dated 6th June, 2007 issued by the Chartered Accountant, in as much as the said certificates did not specifically mention the amount of fixed capital investment in the plant and machinery as on the date of undertaking the expansion program, the actual date of commencing the expansion programme and the exact percentage of the addition of fixed capital investment in the plant and machinery, the respondent stated that the CA certificate dated 6th June, 2007 clearly mentioned the fixed capita ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... invested any amount in the plant and machinery prior to 31st March, 2007 in the unit of M/S Bhagawati Steel Cast Limited acquired by them on lease. The facts remains that M/S Bhagawati Steel Cast Limited has their own investment of ₹ 38,01,837/- prior to 31.03.2007. From the audited balance sheet produced by the respondent I find that the figure is reflected in their financial statement which is in accordance with the CA certificate submitted by them . 13. The order of the Commissioner (Appeals) dated 26.02.2010 was carried to the CESTAT which however was dismissed by the CESTAT on 27.11.2017 because of nonfulfillment of monetary limits in terms of Central Board of Excise and Customs (CBEC) Instructions dated 17.12.2015. 14. A perusal of the show cause notices dated 30.03.2012 which was issued by the Department during the pendency of the appeals before the CESTAT calling upon the petitioner to show cause in respect of refunds for the period of October, 2010 to August, 2011 amounting to ₹ 14,54,228/- as well as the Show Cause Notice dated 08.11.2010 reveals that the findings of the Commissioner (Appeals) in its order dated 26.02.2010 is not referred to in the said show ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Supp (1) SCC 443 held that the order of the Appellate Collector is pending on the Assistance Collector and the working within his jurisdiction order of the Tribunal is binding upon the Assistant Collector and the Appellate Collector who function under the jurisdiction of the Tribunal. The Principles of judicial discipline require that the orders of the higher appellate authority should be followed unreservedly by the Subordinate Authority. The Apex Court held that the orders of Higher Appellate Authority cannot be disregarded as being not acceptable and the same cannot be ground for not following it unless its operation has been suspended by a competent Court. The relevant paragraphs of the Judgment are extracted herein below:- 6. Sri Reddy is perhaps right in saying that the officers were not actuated by any mala fides in passing the impugned orders. They perhaps genuinely felt that the claim of the assessee was not tenable and that, if it was accepted, the Revenue would suffer. But what Sri Reddy overlooks is that we are not concerned here with the correctness or otherwise of their conclusion or of any factual mala fides but with the fact that the officers, in reaching their con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out of the decision or order as may be specified by the Collector of Central Excise in his order and there is a further right of appeal to the department. The position now, therefore, is that, if any order passed by an Assistant Collector or Collector is adverse to the interests of the Revenue, the immediately higher administrative authority has the power to have the matter satisfactorily resolved by taking up the issue to the Appellate Collector or the Appellate Tribunal as the case may be. In the light of these amended provisions, there can be no justification for any Assistant Collector or Collector refusing to follow the order of the Appellate Collector or the Appellate Tribunal, as the case may be, even where he may have some reservations on its correctness. He has to follow the order of the higher appellate authority. This may instantly cause some prejudice to the Revenue but the remedy is also in the hands of the same officer. He has only to bring the matter to the notice of the Board or the Collector so as to enable appropriate proceedings being taken under Section 35-E(1) or (2) to keep the interests of the department alive. If the officer's view is the correct one, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h findings by such Subordinate Authority. Such findings of the Higher Appellate Authority, namely, the Commissioner(Appeals) also attained finality in view of the dismissal of the appeals preferred by the revenue before the CESTAT. 19. In view of all the discussions above, the impugned orders dated 27.01.2020 and 18.12.2019 passed by the respondent No. 3 cannot be allowed to sustain and the same is, therefore, set aside and quashed. Considering the fact that the disagreement by the respondent No. 3 with the findings of the Higher Appellate Authority, namely, the Commissioner (Appeals) is on factual aspect, records of which are available in the Department, the matter is remanded back to the authorities and the respondent authority is directed to pass appropriate orders afresh in the matter after giving adequate opportunities to the petitioner within a period of 3(three) months from today. While deciding the matter, the respondent No. 3 cannot disregard collaterally the findings of the facts by the Commissioner (Appeals) in its order dated 26.02.2010 unless the same is questioned by way of an Appeal/Review/Revision as the case may be. The respondent No. 3 upon passing necessary order ..... X X X X Extracts X X X X X X X X Extracts X X X X
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