2025 (3) TMI 1343 - AT - Central Excise

Appellants entitled to refund of Education Cess and Secondary Higher Education Cess after successful appeal

M/s Insecticides India Ltd. Versus Commissioner of Central Excise, Goods And Service Tax, Jammu

CESTAT Chandigarh allowed the appeal for refund of Education Cess and Secondary Higher Education Cess. The Tribunal relied on its earlier decision in ... Refund of Education Cess & Secondary High Education Cess - rejection of refund of Education Cess & Secondary High Education Cess on the basis of the Hon’ble Apex Court Judgments in the case of Unicorn Industries Vs. UOI [2019 (12) TMI 286 - SUPREME COURT] - HELD THAT:- This issue has already been settled by this Bench in the appellant’s own case involving identical issue M/S INSECTICIDES INDIA LTD VERSUS COMMISSIONER OF CG & ST, JAMMU [2021 (11) TMI 784 - CESTAT CHANDIGARH] wherein it has been held that the orders of the Commissioner (Appeals) is bad in law and the Tribunal has also directed the adjudicating authority to implement the orders passed by the Tribunal in the earlier round of litigation. The Tribunal in the appellant’s own case M/S INSECTICIDES INDIA LTD VERSUS COMMISSIONER OF CG & ST, JAMMU [2021 (11) TMI 784 - CESTAT CHANDIGARH] have allowed the claim of the appellant by relying upon the judgments of the Hon’ble Supreme Court in the case of SRD Nutrients Pvt. Ltd [2017 (11) TMI 655 - SUPREME COURT]. Further, it is found that the appellant was also a party before the Hon’ble Apex Court in the case of SRD Nutrients Pvt. Ltd. The review filed by the Department in SRD Nutrients Pvt Ltd. was also dismissed by the Hon’ble Supreme Court. Further, it is found that before the Commissioner (Appeals) appellant has challenged only part of the adjudication order withholding/rejecting part of the refund claim whereas the Commissioner (Appeals) not only rejected the pending refund claim itself rather ordered for recovery of amount of the already sanctioned claims without any authority of law. Conclusion - The appellants are entitled to a refund of E.Cess and SHE Cess. Appeal allowed. ISSUES PRESENTED and CONSIDEREDThe core legal issue in these appeals is whether the appellants are entitled to a refund of Education Cess (E.Cess) and Secondary and Higher Education Cess (SHE Cess) paid on final goods, despite the rejection of such claims by the Commissioner (Appeals) based on a subsequent Supreme Court judgment. The Tribunal also considered whether the Commissioner (Appeals) erred in ordering the recovery of already sanctioned claims.ISSUE-WISE DETAILED ANALYSISRelevant Legal Framework and PrecedentsThe appellants relied on the exemption under Notification No. 56/2002-CE and Notification No. 01/2010-CE, which grant excise duty exemptions to units in Jammu & Kashmir. The Tribunal's previous decisions in the appellants' cases, based on the Supreme Court's judgment in SRD Nutrients Pvt. Ltd vs. CCE, Guwahati, supported the refund claims for E.Cess and SHE Cess.Court's Interpretation and ReasoningThe Tribunal noted that its previous orders allowing the refund of E.Cess and SHE Cess had attained finality, as they were not challenged by the Department. The Tribunal emphasized that settled matters should not be reopened based on subsequent judgments, especially when the appellant was not a party to those cases.Key Evidence and FindingsThe Tribunal found that the adjudicating authority had partially implemented its previous orders, sanctioning part of the refund claims while rejecting others without issuing a show cause notice or allowing a personal hearing. The Commissioner (Appeals) compounded this by ordering the recovery of already sanctioned claims based on a later Supreme Court judgment in a case where the appellant was not involved.Application of Law to FactsThe Tribunal applied the principle that once an order has attained finality, it binds the lower authorities, who cannot take a different view based on subsequent judgments. The Tribunal highlighted that the appellant was a party to the SRD Nutrients case, which supported their refund claims, unlike the V.V.F Ltd. case, which was cited by the Commissioner (Appeals) to justify the recovery of sanctioned claims.Treatment of Competing ArgumentsThe Tribunal rejected the Department's argument that the subsequent Supreme Court judgment in Unicorn Industries vs. UOI rendered the SRD Nutrients judgment per incuriam. It held that the Commissioner (Appeals) erred in relying on the V.V.F Ltd. case to order recovery, as it was not applicable to the appellant's situation.ConclusionsThe Tribunal concluded that the impugned orders by the Commissioner (Appeals) were unsustainable in law, as they violated the principles of finality and natural justice. The Tribunal set aside these orders and allowed the appeals with consequential relief as per law.SIGNIFICANT HOLDINGSThe Tribunal reaffirmed that once its orders attain finality, they bind lower authorities, who cannot reopen settled matters based on subsequent judgments. The Tribunal emphasized the importance of compliance with appellate orders to maintain administrative order and public faith in the judicial process.Core Principles EstablishedThe Tribunal established that subsequent judgments cannot unsettle settled law, especially when the appellant was not a party to those cases. It reiterated the requirement for lower authorities to adhere to final appellate decisions.Final Determinations on Each IssueThe Tribunal determined that the appellants are entitled to a refund of E.Cess and SHE Cess, as previously decided in their favor, and that the Commissioner (Appeals) erred in ordering the recovery of sanctioned claims. The Tribunal's decision ensures that the appellants receive the refunds due to them, in accordance with the finality of prior orders.