2023 (7) TMI 1563 - AT - Customs

Tribunal Permits New Legal Ground in Appeal Based on Supreme Court Ruling; Merits to Be Assessed Later

The Tribunal allowed the Department to introduce an additional legal ground in the appeal proceedings based on a subsequent Supreme Court decision in ITC ... Refund claim - principles of unjust enrichment - whether the Department could raise an additional legal ground in the appeal proceedings before the Tribunal, based on a subsequent decision by the Hon'ble Apex Court in the case of ITC Ltd. Vs. CCE, Kolkata? - HELD THAT:- It is observed from the decision of M/s. Vivo Mobile India Pvt. Ltd. [2020 (12) TMI 962 - CESTAT NEW DELHI] that in Gannon Dunkerley [2020 (7) TMI 357 - CESTAT NEW DELHI], this Bench of the Tribunal had examined, at length, the relevant statutory provisions to determine whether an additional ground can be taken up under rule 10 of the 1982 Rules in an Appeal before the Tribunal. Though it is correct, as has been contended by learned Senior Counsel appearing for Vivo Mobile, that the ground that is sought to be added is contrary to a ground already taken in the Appeal since initially a ground was taken in the Appeal that the decision relied upon by the Deputy Commissioner was in connection with reassessment of bills of entry and not unjust enrichment, but still in view of the decision of the Supreme Court in ITC limited [2019 (9) TMI 802 - SUPREME COURT (LB)], it is considered appropriate, in the facts and circumstances of the case, to permit the Appellant to raise an additional ground in the two Appeals in view of the principles of law laid down by this Bench in Gannon Dunkerley. Conclusion - i) Pure questions of law can be introduced at any stage of the adjudication process. ii) The introduction of an additional legal ground does not pre-determine its outcome on merits, which will be addressed during the substantive appeal hearing. Application allowed. ISSUES PRESENTED and CONSIDEREDThe core legal issue considered in this judgment was whether the Department could raise an additional legal ground in the appeal proceedings before the Tribunal, based on a subsequent decision by the Hon'ble Apex Court in the case of ITC Ltd. Vs. CCE, Kolkata. Specifically, the issue revolved around the applicability of this decision to a case involving the refund of Countervailing Duty (CVD) and whether such a ground could be introduced at this stage of the proceedings.ISSUE-WISE DETAILED ANALYSISRelevant Legal Framework and PrecedentsThe legal framework involved the interpretation of Section 27 concerning refund claims and the procedural rules under which additional grounds can be introduced during an appeal. The Tribunal considered the precedent set by the Supreme Court in ITC Ltd., which clarified that a refund claim cannot be entertained unless the order of assessment is modified through appropriate proceedings. The Tribunal also referenced its own decision in the case of M/s. Vivo Mobile India Pvt. Ltd., where a similar issue was addressed.Court's Interpretation and ReasoningThe Tribunal interpreted that the additional ground sought by the Department was purely a question of law. It relied on the principle that legal questions can be raised at any stage of adjudication if they are purely legal in nature. The Tribunal drew support from the Supreme Court decision in K. Lubna & Ors. Vs. BEEVI & Ors., which allowed for the examination of pure legal questions at any stage.Key Evidence and FindingsThe Tribunal noted that the Department's request to introduce the additional ground was based on the Supreme Court's decision in ITC Ltd., which was a subsequent development in law. The Tribunal found that this decision was relevant to the case at hand, as it involved the refund of CVD, and thus warranted consideration as an additional ground.Application of Law to FactsThe Tribunal applied the legal principles from the ITC Ltd. decision and the procedural rules to determine that the additional ground could be introduced. It acknowledged that the factual foundation of the case had been laid, and the legal consequences of the Supreme Court's decision had not yet been examined in this context. Therefore, it was appropriate to allow the Department to raise this ground.Treatment of Competing ArgumentsThe Tribunal considered the objections raised by the assessee-respondent, who argued that the impugned order only dealt with the issue of unjust enrichment and not the sanctioning of the refund. The respondent also contended that a subsequent decision should not influence an appeal that was pending before the decision was made. However, the Tribunal emphasized the legal principle that pure questions of law could be raised at any stage, thus allowing the Department's request.ConclusionsThe Tribunal concluded that the Department's application to introduce an additional ground based on the ITC Ltd. decision was justified. It granted the Department leave to add this ground to the appeal, clarifying that this did not imply a decision on the merits of the ground itself, which would be addressed during the substantive hearing of the appeal.SIGNIFICANT HOLDINGSThe Tribunal held that:Pure questions of law can be introduced at any stage of the adjudication process, as supported by the Supreme Court decision in K. Lubna & Ors. Vs. BEEVI & Ors.The subsequent decision in ITC Ltd. provided a relevant legal basis for the Department to raise an additional ground concerning the refund of CVD.The introduction of an additional legal ground does not pre-determine its outcome on merits, which will be addressed during the substantive appeal hearing.Final Determinations on Each IssueThe Tribunal allowed the Department's application to introduce an additional legal ground in the appeal proceedings. The substantive appeal was adjourned, pending the decision on the appeal filed before the Commissioner (Appeals) against the original orders. The Tribunal emphasized that the merits of the additional ground would be considered during the appeal hearing.