COD Clearance Required for Disputes Between State-owned PSUs and Central Government

The Tribunal held that COD clearance is necessary for disputes between State-owned PSUs and the Central Government, despite previous judgments suggesting otherwise. It emphasized adherence to the Supreme Court's directive, requiring clearance even for disputes between Central and State entities. The Tribunal highlighted the need for in-house settlement before legal action, aligning with the Apex Court's stance. Ultimately, the judgment underscores the significance of COD clearance in resolving such disputes and instructs the concerned party to obtain the required clearance.

---

---

Issues:
1. Whether COD clearance is required for a dispute between State owned PSU and the Central Government.
2. Applicability of previous judgments by different courts on the requirement of COD clearance.

Analysis:
1. The judgment addresses the issue of whether COD clearance is necessary for a dispute involving a State-owned PSU and the Central Government. The Tribunal refers to a letter from the Joint Commissioner (Review) and STO (Review) stating that the matter pertains to such a dispute and COD clearance is not required. The Tribunal cites the decision in Karnataka Land Army Corporation Ltd. v. Commissioner of Service Tax, Bangalore and U.P. State Cement Corporation Ltd. v. Union of India to support this stance. However, the Tribunal notes that the Supreme Court's decision in ONGC Ltd. v. City & Indus. Dev. Corpon. Maharashtra emphasizes the need for COD clearance in such cases. The Tribunal concludes that clearance is necessary even for disputes between the Central Government and State entities.

2. The judgment delves into the applicability of previous judgments by different courts regarding the requirement of COD clearance. It highlights the decision of the Hon'ble Allahabad High Court in U.P. State Cement Corporation Ltd.'s case, which emphasized the need for in-house settlement before resorting to legal action. The High Court's decision was based on references to previous judgments, including the Apex Court's ruling in ONGC v. Collector of Central Excise. The Tribunal contrasts this with the Supreme Court's stance in ONGC Ltd. v. City & Indus. Dev. Corpn. Maharashtra, where a committee was recommended to resolve disputes between Central and State entities. The Tribunal concludes that the previous decisions by the High Court and Tribunal are not aligned with the Supreme Court's directives, emphasizing the necessity of COD clearance in such disputes.

In conclusion, the judgment clarifies that COD clearance is required for disputes involving State-owned PSUs and the Central Government, contrary to previous decisions by lower courts. The Tribunal emphasizes the importance of following the Supreme Court's directives in resolving such disputes and directs the concerned party to obtain the necessary COD clearance.

---