2024 (10) TMI 975 - AT - Central Excise

Lower authorities must follow Tribunal precedents unless Revenue specifies grounds for departure under Section 35R(4)

CESTAT Allahabad allowed the appeal, holding that lower authorities are bound by Tribunal precedents. Revenue filed appeal without specifying grounds why ... Gross violation of the CBEC instructions - precedent value of CESTAT decisions - Revenue filed the appeal before the first Appellate Authority without specifying any grounds or reasons why the order of the Tribunal had been wrongly followed by the Adjudicating Authority - HELD THAT:- From perusal of the section specifically 35 R (4) it is evident that this Section, is applicable only for the Commissioner (Appeals) and Appellate Tribunal, and it provides that these authority shall while hearing any appeal shall have regard to circumstances under which the earlier order has been accepted and not challenged before the higher appellate forum by the Department. Above Section is in no way setting aside the well known principle of judicial precedents and the binding nature of the order of the higher Appellate Authority it only provides that when an order has been accepted on monetary limits there should be examination of the issue and order passed either by distinguishing the order or else by following the order - All the authorities below Tribunal would be bound by the earlier order of Tribunal. In the impugned order no ground has been stated from the revenue appeal filed before the said authority which ran contrary to the observation made by the Tribunal in the earlier order dated 15.05.2017. In such a situation impugned order setting aside the order of original authority just for the reason that earlier order of Tribunal was accepted on the monetary grounds cannot be justified. Impugned order even do not record that order of Tribunal was held not acceptable by the reviewing authority to be not acceptable on merits but accepted the same in view of the Board Instruction prescribing the monetary limit for filing the appeal to higher forum. From the order of the original authority it is evident that the demand notices were kept in the call book awaiting the decision of the Tribunal against the order confirming the demand made by the Show Cause Notice mentioned at Sl. No. 1. After the decision of the Tribunal setting aside the said order they have been taken out from the call book and adjudicated as per the order of the Tribunal. There are no merits in the impugned order without specifying any grounds for differing with the available order of the higher Appellate Authority - appeal allowed. Issues:1. Violation of CBEC instructions regarding precedent value of CESTAT decisions.2. Adjudication of demands based on CESTAT orders.3. Applicability of Section 35R(4) in the appeal process.Detailed Analysis:1. The judgment revolves around the violation of CBEC instructions regarding the precedent value of CESTAT decisions. The impugned order was set aside as it was issued in violation of CBEC instructions. The CBEC instructions state that orders accepted on monetary limits should not have precedent value. The case was remanded to the adjudicating authority to pass a fresh order in compliance with the CBEC instructions.2. The demands in question were initially dropped based on the CESTAT decisions. The CESTAT, Allahabad upheld the findings of the Commissioner Appeals, Kanpur, and dismissed the appeal filed by the Department. The CESTAT held that the goods were rightly classified under specific headings, citing relevant legal precedents. The revenue filed an appeal before the First Appellate authority, which was allowed, leading to the current appeal.3. The judgment delves into the applicability of Section 35R(4) in the appeal process. Section 35R(4) applies to the Commissioner (Appeals) and the Appellate Tribunal, requiring them to consider the circumstances under which an earlier order was accepted and not challenged by the Department. The Section does not negate the binding nature of judicial precedents but provides for examination and possible differentiation or adherence to earlier orders accepted on monetary grounds. The Tribunal found no merit in setting aside the original authority's order solely based on the earlier acceptance of the Tribunal's decision on monetary grounds without proper justification or grounds for differing.In conclusion, the appeal was allowed as the impugned order lacked merit in setting aside the original authority's decision without proper justification or grounds for differing with the earlier CESTAT decision accepted on monetary limits. The judgment emphasizes the importance of adhering to legal precedents and CBEC instructions while adjudicating appeals.