Doctrine of merger barred reopening of concluded excise duty liability after the Supreme Court dismissed the revenue's appeal.

Revenue authorities could not reopen a concluded excise duty liability by adopting a fresh reading of earlier orders after the Supreme Court dismissed the revenue's appeal. The Tribunal had already held that the supplies were outside Notification No. 2/95 and that the duty demand was unsustainable; once the Supreme Court dismissed the appeal as covered against the revenue, the Tribunal's order merged with the Supreme Court's order. The lower authorities were bound to give full effect to that finality and could not revive the same demand by re-interpretation. The impugned orders were therefore unsustainable and were quashed in favour of the assessee.

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Issues: Whether the revenue authorities could disregard the effect of the dismissal of the revenue's appeal by the Supreme Court and reopen the petitioner's concluded duty liability by relying on a different interpretation of the earlier orders.

Analysis: The Tribunal had earlier held that the supplies were not covered by Notification No.2/95 and that the demand of excise duty was unsustainable. The Supreme Court dismissed the revenue's appeal, stating that the matter was covered against the revenue. On that dismissal, the Tribunal's order merged with the Supreme Court's order, and the lower authorities were bound to give full effect to it. The impugned orders attempted to revive the very demand that had already failed before the highest court, contrary to the doctrine of merger and settled judicial discipline.

Conclusion: The revenue authorities could not reopen or re-interpret the issue of duty liability after the Supreme Court's dismissal of the revenue's appeal. The impugned orders were unsustainable and were quashed in favour of the assessee.

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