Merged appellate orders cannot be reviewed, and exemption or duty denial cannot rest on conjecture without proof of manufacture.

An order that has merged in a later appellate order is not available for review under Section 35E(2), so a departmental appeal based on such review is not maintainable. The note also states that exemption under Notification No. 22/82-C.E. cannot be denied, and differential duty cannot be demanded, without evidence that the disputed Central Excise stamps were brought into the factory or used in manufacture. A demand resting only on conjecture, or on unproven liability against individuals rather than the unit, is unsustainable. The Revenue's challenge therefore failed on both maintainability and merits, and the concessional benefit remained available.

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Issues: (i) Whether the departmental appeal filed pursuant to review under Section 35E(2) of the Central Excises and Salt Act, 1944 was maintainable after the original order had already merged with the earlier order-in-appeal. (ii) Whether the benefit of Notification No. 22/82-C.E. could be denied and differential duty demanded on the footing that the disputed Central Excise stamps were used in manufacture.

Issue (i): Whether the departmental appeal filed pursuant to review under Section 35E(2) of the Central Excises and Salt Act, 1944 was maintainable after the original order had already merged with the earlier order-in-appeal.

Analysis: The original adjudication had already been carried in appeal and modified before the review was undertaken. Once the order-in-original had merged with the appellate order, there remained no subsisting order of the original authority capable of review. In such a situation, a departmental appeal founded on the subsequent review could not be sustained.

Conclusion: The appeal was not maintainable and the finding of the Collector (Appeals) on this point was upheld, against the Revenue.

Issue (ii): Whether the benefit of Notification No. 22/82-C.E. could be denied and differential duty demanded on the footing that the disputed Central Excise stamps were used in manufacture.

Analysis: The finding that the notification benefit was not liable to be denied had attained finality because the Revenue had not successfully challenged it. On the duty demand, the record contained no evidence that the stamps were brought into the factory or used in manufacture, and the demand rested only on conjecture. The demand was also unsustainable because the basis for fastening liability on the individual brothers, rather than on the unit, was not established.

Conclusion: The Revenue failed to establish any ground for denial of the notification benefit or for recovery of differential duty, against the Revenue.

Final Conclusion: The Revenue's challenges failed on both maintainability and merits, and the assessees retained the benefit of the concessional notification without the disputed duty demand being revived.

Ratio Decidendi: An order that has already merged in a subsequent appellate order is not available for review, and a duty demand or denial of exemption cannot rest on conjecture without evidence of removal or use of the goods in the assessee's manufacture.

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