Revisional power cannot be used to defeat a refund order when no stay is obtained and no merits error is shown.

Revisional power under Section 36(2) of the Central Excises and Salt Act could not be used to unsettle a refund order merely because the Department's appeal remained pending, where no stay of the underlying High Court judgment had been obtained and no error on the merits of the refund order was shown. The Bombay High Court treated the show cause notice as an unbona fide attempt to frustrate implementation of the judicial order and struck it down, with the challenge succeeding for the petitioners.

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Issues: Whether the show cause notice issued under Section 36(2) of the Central Excises and Salt Act seeking to set aside the refund order was sustainable.

Analysis: The notice was founded not on any error in the refund order on merits, but on the premise that the appellate refund order should not have been passed because the departmental appeal had become infructuous after the High Court judgment. The Court held that such use of revisional power was uncalled for and not bona fide, particularly when the Department had not obtained any stay from the Supreme Court against the High Court judgment and could not use Section 36(2) to defeat the refund merely because its further appeal was pending. The Court therefore treated the notice as an illegal attempt to frustrate implementation of the judicial order.

Conclusion: The show cause notice was struck down and the challenge succeeded, in favour of the petitioners.

Ratio Decidendi: Revisional power cannot be invoked bona fide to unsettle a refund order merely because the Department's appeal is pending, when no stay of the underlying judgment has been obtained and no error on merits in the refund order is identified.

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