2016 (11) TMI 1277 - AT - Central Excise

Tribunal grants refund of pre-deposit with interest on delay, finalizes appeal dismissal by apex court

The Tribunal ruled in favor of the appellant, holding that the pre-deposit made during the appeal process should be refunded with interest in case of ... Doctrine of merger - Exercise of appellate jurisdiction on grant of leave - Finality of appellate dismissal - Pre-deposit refund with interest - Binding nature of Supreme Court decisions under Article 141Doctrine of merger - Exercise of appellate jurisdiction on grant of leave - Finality of appellate dismissal - Pre-deposit refund with interest - Binding nature of Supreme Court decisions under Article 141 - Effect of the Supreme Court's dismissal of Revenue's appeal on the Tribunal's competence to reopen merits and on entitlement to refund of pre-deposit with interest - HELD THAT: - The Tribunal examined whether a revenue appeal dismissed by the Supreme Court on merits results in merger of the Tribunal's order into the appellate order, thereby precluding reconsideration by the Tribunal and entitlement to a refund of the pre-deposit with interest. Relying on the principles in Kunhayammed, the Bench noted that when leave to appeal is granted and the Supreme Court exercises appellate jurisdiction, the order impugned is subjected to appellate scrutiny and, irrespective of whether the appellate order is speaking or non-speaking, the order appealed against merges in the appellate order. The appellate order-whether dismissal, reversal or modification-becomes the law of the land under Article 141. Applying these propositions, the Bench held that the Supreme Court's dismissal dated 05.08.2015 involved scrutiny of the Tribunal's order and therefore merged the Tribunal's order into the appellate order; consequently the Tribunal lacked jurisdiction to reopen the merits or entertain Revenue's attempt to relitigate entitlement to refund of the pre-deposit with interest. The Tribunal therefore rejected Revenue's application for reconsideration as unwarranted. [Paras 5, 6, 7, 8]Revenue's plea to reopen the merits is barred by merger of the Tribunal's order in the Supreme Court's dismissal; miscellaneous application rejected and appeal allowed in favour of the appellant.Final Conclusion: The Supreme Court's dismissal of Revenue's appeal merged the Tribunal's order into the appellate order, precluding further reconsideration by the Tribunal; accordingly the miscellaneous application is rejected and the appellant's appeal is allowed. Issues:1. Whether pre-deposit made by the appellant during the appeal's pendency should be refunded with interest in case of delay.2. Effect of dismissal of the Revenue's appeal when the final order of the Tribunal merges with the apex court's dismissal order.Issue 1: Pre-deposit Refund with InterestThe dispute revolves around the refund of the pre-deposit made by the appellant during the appeal process. Both sides referred to a Supreme Court order in Civil Appeal Nos.805 of 2006, which dismissed the appeals against the Revenue, citing a previous judgment. The Revenue argued that the dismissal of their appeal followed a specific decision and urged the Tribunal to consider their appeal in light of another case law. However, the appellant's counsel opposed the Revenue's submission, emphasizing that once a Civil Appeal is dismissed, the matter reaches finality, and there is no basis for reopening it. The Tribunal heard both sides and examined the records to determine the impact of the dismissal of the Revenue's appeal on the pre-deposit refund issue.Issue 2: Merger of Tribunal's Order with Apex Court's DismissalThe core issue is the effect of the dismissal of the Revenue's appeal on the final order of the Tribunal. The Tribunal analyzed the legal principles established by the Supreme Court in Kunhayammed Vs State of Kerala, which clarified the consequences of granting a Special Leave Petition (SLP) and subsequent dismissal or modification of the appeal. The Tribunal highlighted key propositions from the Kunhayammed case, emphasizing that when the appellate jurisdiction is exercised by the apex court, the impugned order merges with the appellate order. The Tribunal examined the Apex court's order dismissing the Revenue's appeal and concluded that the merits of the impugned order were scrutinized and dismissed by the court. Therefore, the Tribunal held that the dismissal order of the apex court precludes any reconsideration of the Revenue's appeal at the Tribunal level. Citing the legal principles from Kunhayammed's case, the Tribunal rejected the Revenue's miscellaneous application and allowed the appellant's appeal.In conclusion, the Tribunal's judgment addressed the issues of pre-deposit refund with interest and the merger of the Tribunal's order with the apex court's dismissal order. By applying the legal principles established by the Supreme Court, the Tribunal ruled in favor of the appellant and rejected the Revenue's attempt to reopen the case. The judgment underscores the finality of the dismissal of the Revenue's appeal and the legal implications of such a dismissal on the Tribunal's order.