TaxTMI 
TaxTMI 
2018 (4) TMI 1233
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....itional Director for recovery of duty of Rs. 8,45,483/­ on clearance of the pipes during the period from April, 1996 to October, 1998 by denying SSI exemption. The Order­-in­-Original was passed on 18th October 2000 by the Joint Commissioner of Excise confirming the demand of Rs. 8,45,483/­. The same amount was imposed by way of penalty under Section 11AC of the Central Excise Act, 1944 (for short "the said Act of 1944"). Duty of Rs. 2 lakhs under Rule 173Q of the Central Excise Rules, 1944 (for short "the said Rules of 1944") was also demanded by the said order. The SSI exemption was denied on the ground that the appellant was manufacturing pipes bearing a mark "Jain Pipe" and that "Jain Pipe" was a brand name. An Appeal was preferred by the appellant against the Order­-in­-original dated 18th October, 2000. The Commissioner (Appeals) allowed the Appeal by holding that Jain Pipe cannot be considered as a brand name. The appellant had deposited various amounts in accordance with Section 35F of the said Act of 1944. According to the case of the appellant, during the pendency of the Appeal, the appellant suspended manufacturing activities and surrendered its r....
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....tral Excise registration was surrendered by them in September 2000 i.e. before making of debit entry in RG­23 account. As such, even if the amounts towards duty would not have been debited by them in the said account, the same would have been remained unutilized. As such, on the success of their appeal before the Commissioner (Appeals), they cannot claim the refund of the same in cash, in as much as on account of such debit entry, they have not discharged any duty out of PLA. If the said refund is granted to the appellants by way of cash, the same would amount to making him unjustifiable enrich." 6. The larger Bench directed the Appeal to be placed before the regular Bench and the regular Bench dismissed the Appeal by the Order dated 30th March 2007 on the basis of the findings of the larger Bench. The challenge in the Appeal No.13 of 2017 is to both the said orders. 7. The Central Excise Appeal No.257 of 2007 has been preferred by the revenue. The respondent was served with show cause notice on the basis of refund claim made by the respondent in the sum of Rs. 93,88,915/­. The respondent - assessee was engaged in manufacture of Cotton and Manmade Fabrics falling under Ch....
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....n inputs." 12. Appeal No.28 of 2008 was admitted by order dated 6th August 2008 on the three questions of law framed which read thus : "Whether refunding CENVAT credit taken on inputs as cash refund is proper and legal when the final product is exempted from duty after credit is taken." 13. The learned counsel appearing for the appellant in Appeal No.13 of 2007 pointed out the decision of a Division Bench of Karnataka High Court in the case of Union of India Vs. Slovak India Trading Co. Pvt. Ltd. 2006(201) E.L.T. 559 (Kar.). He pointed out that Karnataka High Court held that even if there is no express provision in Rule 5 of the Cenvat Credit Rules, 2002 which deals with refund of Cenvat credit, in a contingency where credit could not be used due to the fact that manufacturing activity was stopped due to closure of the company, refund can be ordered in such a case. He pointed out that by order dated 25th January, 2007, the decision of the Karnataka High Court has been upheld on merits by the Apex Court. He pointed out the decision of the Appellate Tribunal at Mumbai in the case of Jain Vanguard Polybutylene Ltd. Vs. Commissioner of Central Excise, Nashik 2009 (247) E.L.T. 658 (....
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....tent view in favour of the appellant-assessee. The said decisions are in the following cases: "1. Shree Prakash Textiles - 2004 (169) ELT 162 (T) 2. CCE v. Kores (India) Ltd. ­ 2009 (245) ELT 411 (T) 3. CCE v. Jai Ganpati Metals - 2015 (322) ELT 730 (T) 4. CCE v. Apex Drugs & Intermediates - 2014 (314) ELT 729 (T) 5. Upheld by AP - HC - 2015(322) ELT 834 (AP) 6. CCE v. Kochar Sung­up Acrylic Ltd. ­ 2010 (259) ELT 713 (T) 7. Lohia Polyester Pvt. Ltd. 2014 (313) ELT 435 (T)" 14. The learned counsel for the Revenue supported the stand taken by the Revenue before the Appellate Tribunal in Appeal No. 13 of 2007. He urged that the decision of the Karnataka High Court in the case of Slovak India Trading Co. Pvt. Ltd.(supra) has not been confirmed by the Apex Court on merits. But the confirmation is only on the basis of the concession. 15. We have given careful consideration to the submissions. 16 Before the Karnataka High Court, the following three questions were framed : "(a) Whether under the facts and circumstances of the case the Tribunal is right in ordering for refund even if there is no provision in Rule 5 of Cenvat Credit Rules 2002, to refund the unutilized ....
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.... of the Tribunal, revenue filed C.E.A. No.5/2006 in the High Court of Karnataka at Bangalore. The High Court by its impugned order has affirmed the order of the tribunal and dismissed C.E.A. No.5/2006 filed by the revenue. Learned ASG appearing for the Union of India fairly concedes that those decisions of the Tribunal, which were relied upon by the Tribunal, have not been appealed against. In view of the concession made by the learned ASG, this special leave petition is dismissed." (emphasis added) 19. In the case of Jain Vanguard Polybutylene Ltd. (supra), the same question arose before the Appellate Tribunal as to whether a refund under Rule 5 of the Cenvat Credit Rules, 2004 of the un­utilized Cenvat credit availed by the assessee can be allowed on the ground of the closure of the factory. The Tribunal relied upon the decision of the Karnataka High Court in the case of Slovak India Trading Company and noted that the said decision has been confirmed by the Apex Court and therefore, allowed the Appeal of the assessee. This order was carried by the Revenue to this Court. The Appeal was dismissed in­ limine by a Division Bench of this Court by making the following observa....
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....his principle, we cannot take any other view other than the one approved by the Apex Court, which came before it from the Karnataka High Court. 4. In the above view of this matter, Appeal is dismissed in limine with no order as to costs." (emphasis added) 20. As far as the effect of dismissal of Special Leave Petition is concerned, the law is crystallized in the case of Kunhayammed & Ors. Vs. State of Kerala and Anr. (2000) 6 SCC 359. Paragraph 44 of the said decision reads thus :­ "44. To sum up, our conclusions are : (i) Where an appeal or revision is provided against an order passed by a court, tribunal or any other authority before superior forum and such superior forum modifies, reverses or affirms the decision put in issue before it, the decision by the subordinate forum merges in the decision by the superior forum and it is the latter which subsists, remains operative and is capable of enforcement in the eye of law. (ii) The jurisdiction conferred by Article 136 of the Constitution is divisible into two stages. The first stage is upto the disposal of prayer for special leave to file an appeal. The second stage commences if and when the leave to appeal is granted ....
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.... leave to appeal having been converted into an appeal before the Supreme Court the jurisdiction of High Court to entertain a review petition is lost thereafter as provided by sub­-rule (1) of Rule 1 of Order 47 CPC." (emphasis added) 21. In the light of what is held by the Apex Court, the effect of dismissal of Special Leave Petition against the decision of the Karnataka High Court will have to be considered. We have already quoted the order of the Apex Court in the Special Leave Petition. The first part of the order is only a statement of fact. It contains a list of the decisions relied upon by the Appellate Tribunal and it mentions that the view taken by the Tribunal has been confirmed by the Karnataka High Court. Thereafter, concession of the learned Additional Solicitor General of India is recorded that the decisions of the Appellate Tribunal which were relied upon by the Tribunal in the said case have not been appealed against. Prima facie, it is only in the light of this factual concession that the Special Leave Petition has been dismissed. 22. We have quoted the entire decision of the Division Bench of this Court in the case of Jain Vanguard (supra). The Division Benc....
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....decision of the Apex Court in the case of Commissioner of Central Excise, Hyderabad Vs. Novapan Industries Limited 2007 (209) E.L.T. 161 (S.C.) and in particular what is observed in paragraph 14 thereof, which reads thus :­ "14. In view of a catena of decisions of this Court, it is settled law that the department having accepted the principles laid down in the earlier case cannot be permitted to take a contra stand in the subsequent cases (see : Birla Corporation Ltd. v. CCE [2005 (186) E.L.T. 266 (S.C.)], Jayaswals Neco Ltd. v. CCE, Nagpur [2006 (195) E.L.T. 142 (S.C.)] etc." 28. In the present case, the revenue did not accept the decision of the Division Bench of this Court in the case of Jain Vanguard Polybutylene Ltd (supra). While dismissing the SLP preferred by the revenue, the Apex Court has specifically observed that the question of law which arose before the Division Bench of this Court is kept open. The said question which was kept open expressly arises in this group of Appeals. 29. We may also make a reference to the decision of the larger bench of the Appellate Tribunal in the case of Steel Strips Vs. Commissioner of Central Excise, Ludhiana (supra). The question....