Doctrine of merger bars a separate Revenue appeal seeking the same enhancement of penalty after appellate reduction.

The doctrine of merger rendered the Revenue's separate appeal against reduction of penalty unsustainable where the penalty imposed under Rule 96ZP(3) had already been reduced in the assessee's appeal by the Commissioner (Appeals). Once the subject-matter order stood absorbed in the later appellate order, a further departmental challenge seeking the same enhancement of penalty did not survive. The appeal was therefore dismissed as not maintainable.

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Issues: Whether the Revenue's appeal against reduction of penalty was maintainable in view of the doctrine of merger.

Analysis: The penalty originally imposed under Rule 96ZP(3) of the erstwhile Central Excise Rules, 1944 had already been reduced in the assessee's appeal by the Commissioner (Appeals). The department's separate appeal against the quantum of penalty had, by then, been rendered ineffective because the lower appellate order had merged into the subsequent appellate order, and the later order in the departmental appeal had itself been partly allowed with enhancement of penalty.

Conclusion: The Revenue's appeal was not maintainable and was dismissed.

Ratio Decidendi: Once the subject-matter order has merged in a later appellate order, a further appeal seeking the same enhancement of penalty does not survive.

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