Doctrine of merger does not bar separate Revenue appeal on penalty where the grievance is distinct from the assessee's appeal.

Where the assessee's and Revenue's appeals arise from the same adjudication order but concern distinct grievances, the doctrine of merger does not bar independent consideration of the Revenue's appeal on penalty under Section 11AC of the Central Excise Act, 1944. The adjudication order had confirmed duty but imposed no penalty, so the Revenue's challenge remained confined to penalty alone and was not absorbed by the assessee's appeal decided on merits. The earlier appellate order therefore did not extinguish the Revenue's separate grievance, and dismissal on merger grounds was unsustainable; the matter had to be reconsidered afresh.

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Issues: Whether the doctrine of merger applied so as to bar the Revenue's appeal for penalty under Section 11AC of the Central Excise Act, 1944 when the assessee's appeal against the adjudication order had already been decided on merits.

Analysis: The adjudication order had confirmed the demand but imposed no penalty. The assessee's appeal and the Revenue's appeal before the Commissioner (Appeals) raised distinct grievances, and the Revenue's challenge was confined to the question of penalty. In such circumstances, the earlier appellate order did not absorb or merge the later appeal concerning penalty. The principle of merger was held inapplicable to the Revenue's separate grievance on penalty.

Conclusion: The doctrine of merger did not apply, and the order dismissing the Revenue's appeal on that ground was unsustainable. The matter was required to be reconsidered afresh.

Ratio Decidendi: Where the assessee's and Revenue's appeals arise from the same adjudication order but relate to separate grievances, the principle of merger does not bar independent adjudication of the Revenue's appeal on penalty.

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