2024 (9) TMI 1247 - HC - Central Excise

Revenue cannot re-agitate settled MODVAT credit benefits after failing to challenge final CESTAT decision

Commissioner, Central Excise & Service Tax, Dibrugarh Versus Hindustan Coca Cola Beverages Private Limited.

HC dismissed Revenue's appeal regarding notification benefits for July 1999-November 2002 period. Revenue had previously lost before CESTAT for ... Applicability of the N/N. 33/99-CE dated 08.07.1999 as amended - DIC certificate issued dated 10.05.1993 could form the basis for determination of installed capacity during pre-expansion period or not - cut off date was to be treated on or after 24.12.1997 or not - HELD THAT:- The show cause notice, in relation to the period running from July, 1999 to May, 2002, was issued on 03.10.2002, whereas the show cause notice relevant for the present appeal was issued on 05.09.2003, which was in relation to the period July, 1999 to November, 2002. Admittedly, the subsequent show cause notice dated 05.09.2003 includes the period July, 1999 to May, 2002, for which the CESTAT has already passed an order in favour of the respondent, which has attained finality and, therefore, it is not open for the Revenue to again -agitate the said issue by way of issuing a fresh show cause notice. The action on the part of the Revenue of not challenging the decision of the CESTAT in relation to the period July, 1999 to May, 2002, which is included in the subsequent show cause notice dated 05.09.2003, disentitles it from challenging the same. The Hon’ble Supreme Court has disallowed the Revenue to take different stand in the same situation in BIRLA CORPORATION LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE [2005 (7) TMI 104 - SUPREME COURT]. The Hon’ble Supreme Court has observed 'assessee is held to be entitled to MODVAT Credit'. Taking into consideration the fact that the issue regarding availment of benefit by the respondent of the Notification dated 08.07.1999 has already been settled in favour of it by CESTAT, vide order dated 20.01.2005, in relation to the period running from July, 1999 to May, 2002 and the same has attained finality because the Revenue has accepted the said decision and has not challenged it further in appeal or other proceedings, there are no case for interference. The present Central Excise Appeal is dismissed. Issues:1. Interpretation of Notification No. 33/99-CE dated 08.07.1999.2. Validity of DIC certificate for determining installed capacity pre-expansion.Analysis:Issue 1: Interpretation of Notification No. 33/99-CE dated 08.07.1999The case involved a dispute where the Revenue alleged that the respondent wrongly availed the benefit of Notification No. 33/99-CE dated 08.07.1999, leading to a refund of central excise duty. The show cause notice highlighted anomalies in the claimed expansion of installed capacity by the respondent after 24.12.1997. The Commissioner initially dropped the charges based on a CESTAT decision, but the Revenue appealed. The CESTAT upheld its previous decision, emphasizing that the Revenue had not challenged the earlier decision, which attained finality. The High Court cited precedents where the Revenue was not allowed to take a different stand in similar situations, ensuring consistency and predictability in legal decisions. Ultimately, the High Court dismissed the appeal, as the issue had already been settled in favor of the respondent by the CESTAT.Issue 2: Validity of DIC certificate for determining installed capacity pre-expansionThe second question of law revolved around whether a DIC certificate issued in 1993 could be the basis for determining installed capacity during the pre-expansion period, considering the cut-off date specified in the notification. The court's analysis primarily focused on the finality of the CESTAT decision in favor of the respondent for the period from July 1999 to May 2002. The court emphasized that the Revenue's failure to challenge the earlier decision precluded them from raising the same issue in subsequent proceedings. Citing judicial principles, the court reiterated the importance of consistency in legal decisions and the need to refer conflicting decisions to a larger bench for resolution. Ultimately, the court found no grounds for interference and dismissed the Central Excise Appeal.In conclusion, the High Court upheld the CESTAT's decision, emphasizing the importance of consistency in legal interpretations and the finality of previous decisions. The court's analysis focused on the Revenue's inability to challenge settled matters and the need for adherence to established legal principles to maintain clarity and predictability in legal proceedings.