2014 (11) TMI 669 - HC - Central Excise

Court affirms CESTAT's duty liability decision based on Supreme Court rulings. Timely dispute resolution emphasized.

GUJARAT NARMADA VALLEY FERTILIZERS CO. LTD. Versus COMMR. OF C. EX. & CUS.

The Court upheld CESTAT's decision to impose duty liability on the Appellant based on Supreme Court judgments referred to a Larger Bench. The Court ... Cenvat credit on Low Sulphur Heavy Stock – Use of fuel in generation of electricity further used - Relied upon judgment of Supreme Court [2009 (8) TMI 14 - SUPREME COURT] referred to Larger Bench - Held that:- In the case of State of Rajasthan v. M/s. R.S. Sharma and Co., reported in [1988 (8) TMI 412 - SUPREME COURT OF INDIA], a question arose, whether question pending decision of Larger Bench of Supreme Court meanwhile particular case to be decided on the basis of present position of law or not. In the case before the Hon’ble Supreme Court the question whether on the ground of absence of reasons Award under Arbitration Act was bad per se, was pending consideration by Constitution Bench of the Hon’ble Supreme Court and therefore, it was averred that courts should wait adjudication on the aforesaid point by the Constitution Bench. The Hon’ble Supreme Court did not accept the said contention and opined that pendency of the aforesaid question would not postpone all the decisions by the Court. The Hon’ble Supreme Court observed that one of the cardinal principles of administration of justice is to ensure quick disposal of the disputes in accordance with law, justice and equity. The Hon’ble Supreme Court further observed that the justice between the parties in a particular case should not be in a suspended animation. - No substantial question of law arises - Decided against assessee. Issues:1. Can CESTAT saddle the Appellant with duty liability based on a judgment referred to a Larger Bench by the Supreme CourtRs.2. Is filing a Tax Appeal against CESTAT's order the only recourse when the issue is pending before a Larger BenchRs.3. Was it proper for CESTAT to decide on an issue referred to a Larger Bench by the Supreme CourtRs.4. Would passing the impugned order lead to multiplicity of proceedingsRs.Analysis:Issue 1: The Appellant challenged CESTAT's decision to impose duty liability based on judgments referred to a Larger Bench by the Supreme Court. The Appellant argued that CESTAT should have awaited the Larger Bench's decision. However, the Court noted that the Supreme Court decisions in question were still binding unless overruled by the Larger Bench. The Court found no error in CESTAT's reliance on these decisions, which held that certain inputs were not eligible for Cenvat credit under Rule 6(1) of the Cenvat Credit Rules, 2002.Issue 2: The Appellant contended that CESTAT should have kept the appeal pending until the Larger Bench decided on the referred judgments. The Court cited the case of State of Rajasthan v. M/s. R.S. Sharma and Co., where the Supreme Court held that pending questions before a Larger Bench do not necessarily postpone all decisions. The Court emphasized the need for quick dispute resolution and justice between parties without delay.Issue 3: The Court rejected the Appellant's argument that CESTAT should have refrained from deciding on the issue referred to a Larger Bench. The Court cited previous judgments emphasizing the importance of timely dispute resolution and the principle that justice should not be delayed indefinitely.Issue 4: The Appellant raised concerns about the impugned order potentially leading to multiplicity of proceedings. However, the Court found no merit in this argument and concluded that no substantial question of law arose. Consequently, the Court dismissed the appeal, affirming CESTAT's decision on the duty liability issue.