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TMI Blog2025 (3) TMI 500X X X X Extracts X X X X X X X X Extracts X X X X ..... 024 on the ground that the same was passed by the adjudicating authority contrary to the directions issued by the Central Excise and Service Tax Appellate Tribunal(For short "CESTAT"). 5. Brief facts of the case are that the petitioners are engaged in the work of joining various material M.S.., S.S. or alloy pipes together or welding together through machines which is also called finning/studding by use of intermediate goods to manufacture final products to manufacture the Heat Exchangers that are sold on their own account. It is the case of the petitioners that apart from manufacturing the Head Exchangers, the petitioners also undertake job work for various principal manufactures who were duly registered under the Central Excise Act, 1944 (For short "the Act"). 6. The principal manufacturers supply only pipes M.S., S.S., or alloy pipes on which the petitioners undertake the process of finning/studding using certain own inputs and clears the same to the principal manufacturer on payment of Central Excise Duty under the cover of excisable invoice. The petitioners therefore, were not considering the value of free supply of pipes received by it as intermediate goods which the princi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Revenue preferred an appeal before CESTAT challenging the order dated 20.12.2016 only on the ground that judgment of the Supreme Court in case of M/s. International Auto Ltd. (supra) was rendered after considering the fact that the principal manufacturer has discharged the duty on the total value of the final product whereas in the facts of the present case, aspect of payment of duty by the principal manufacturer was not verified. 13. Considering such submissions, the CESTAT allowed the appeal of the Revenue by order dated 08.02.2024 by setting aside the order of dropping the proceedings and remanded the matter to the adjudicating authority with a direction to the said authority to verify whether principal manufacturer has paid duty on the total value of the final products including the value of the free material supplied by the principal manufacturer to the petitioners for job work for applying the ratio of decision of Hon'ble Apex Court in case of M/s. International Auto Ltd. (supra). 14. It appears that based upon the direction issued by the CESTAT, the petitioners made submissions on 30.07.2024 before the adjudicating authority contending inter-alia that the free issue materi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion at this juncture will not serve any purpose if the judicial discipline is followed and judgment of the Apex Court is followed." 16. CESTAT while remanding the matter allowing the appeal filed by the Revenue observed as under: "On careful consideration of the submission made by both sides and perusal of records, we find that the Revenue's appeal is for limited purpose that even for applying the ratio of the judgment in the case of International Auto Limited, the facts whether the Principal manufacturer has paid the duty on the total value of the final product which includes the value of the goods supplied to the job worker under Rule 4 (5) (a) of Cenvat Credit Rules was not considered. However, on the close scrutiny of the order we find that the learned Adjudicating Authority has assumed that the principal manufacturer has discharged the duty on the total value of the finished product cleared by the principal manufacturer. However, no verification in this regard was made by the Adjudicating Authority. We find that since the International Auto Ltd case is solely based on the fact that the principal manufacturer has adjusted the duty while clearing the final product but in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Judicial Commissioner went on to examine the correctness or otherwise of the order of the Tribunal and found that the Tribunal went wrong in not treating the centers as 'markets' within the meaning of r. 23 of the Income-tax Rules. He then came to the conclusion that in view of the error committed by the Tribunal, there was no manifest injustice as a result of the order of the respondent; accordingly, he dismissed the application for the issue of a writ made by the appellant company. We think that the learned Judicial Commissioner was clearly in error in holding that no manifest injustice resulted from the order of the respondent conveyed in his letter dated March 24, 1955. By that order the respondent virtually refused to carry out the directions which a superior tribunal had given to him in exercise of its appellate powers in respect of an order of assessment made by him. Such refusal is in effect a denial of justice, and is furthermore destructive of one of the basic principles in the administration of justice based as it is in this country on a hierarchy of courts. If a subordinate tribunal refuses to carry out directions given to it by a superior tribunal in the exer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ey 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 in their conclusion, by-passed two appellate orders in regard to the same issue which were placed before them, one of the Collector (Appeals) and the other of the Tribunal. The High Court has, in our view, rightly criticised this conduct of the Assistant Collectors and the harassment to the assessee caused by the failure of these officers to give effect to the orders of authorities higher to them in the appellate heirarchy. It cannot be too vehemently emphasised that it is of utmost importance that, in disposing of the quasi-judicial issues before them, revenue officers are bound by the decisions of the appellate authorities; The order of the Appellate Collector is binding on the Assistant Collectors working within his jurisdiction and the order of the Tribunal is binding upon the Assistant Collectors and the Appellate Collectors who function under the jurisdictio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome 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 will no doubt be finally upheld and the Revenue will get the duty, though after some delay which such procedure would entail. 8. We have dealt with this aspect at some length, because it has been suggested by the learned Additional Solicitor General that the observations made by the High Court, have been harsh on the officers. It is clear that the observations of the High Court, seemingly vehement, and apparently unpalatable to the Revenue, are only intended to curb a tendency in revenue matters which, if allowed to become widespread, could result in considerable harassment to the assesses-public without any benefit to the Revenue. We would like to say that the department should take these observations in the proper spirit. The observations of the High Court should be kept in mind in future and the utmost regard should be paid by the adjudicatin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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