TaxTMI 
TaxTMI 
2018 (11) TMI 1478
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....laim for Rs. 84,11,937/-, was presented on 06.11.2000. On 30.12.2000, the Assistant Commissioner of Customs, rejected the refund application. 4. An appeal was taken to the Commissioner (Appeals). The Commissioner (Appeals), vide, order, dated 27.09.2001, rejected the appeal. The Commissioner (Appeals) took the view that, since the order of assessment had attained finality, refund application on the ground that the amount was paid wrongly due to misclassification of goods could not have been entertained. The Commissioner (Appeals) relied on the judgement of the Hon'ble Supreme Court of India in the case of Commissioner of Central Excise, Kanpur Vs Flock India Pvt. Ltd [2000 (120) ELT 285(SC)]. The order of the Commissioner (Appeals) was further challenged before the Customs, Excise and Gold (Control) Appellate Tribunal, South Zone. The Tribunal by its order, dated 24.04.2003, held that,when a refund claim is filed by the assessee by not accepting the classification and the rate of duty, etc., mentioned in the Bill of Entry, such refund claim is entertainable because the assessment also gets challenged by filing such refund claim. The Tribunal therefore, remanded the matter to....
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....d a very short order as under:- "Right of refund arises out of the order dated 31.03.2004 appearing at page 69 to 72 of the appeal record. Once that right accrues and not reversed by a higher court, that is to be undeniable. a. Revenue says that the assessment was not challenged. b. Above proposition of Revenue is not acceptable to law for the 6 reason that after the appellate order, no assessment order survives. Doctrine of merger applies and the order of the adjudicating authority has already merged with the order of the appellate order. Accordingly, refund to the appellant is admissible and authority shall act accordingly. c. In the result, appeal is allowed." 9. When the matter came up for hearing it was decided to first consider the review petition No.167/2018 which had been numbered after the delay was condoned, by this Court. The review petition was allowed by an order dated 28.06.2008 and a Reference case Petition No.02/2012 was restored to file. Both C.M.A.No.986 of 2018 and Reference case Petition No.02/2012 are being taken up for consideration with the consent of both the parties. 10. The learned counsel for the appellant would s....
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....g a refund application, their classification would automatically be decided by the adjudicating authority. c. Flock India deals with a refund claim filed under Section 11B off the Central Excise Act and not under Section 27 of the Customs Act where in the language off the provision is distinguishable. d. The respondents were not given the benefit of a speaking order as in the case of Flock India at the time of assessment (Supra). In Flock India (Supra), the Assistant Collector had passed a speaking order clearly giving clear reasons, as to why, the goods are classifiable under 22-B. The Assistant collector even went ahead to expressly state in the speaking order that the Assessee may prefer an appeal against his order before the Collector (appeals) which was not done in this instant case. e. The respondent in the case of Flock India did not pay the duty under protest but in the instant case, the respondent herein had lodged their protest. f. Assuming but not admitting the fact that a Bill of Entry is an appealable order, it is the case of the respondents that their protest was not vacated by way of a speaking order. It was contended that....
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....on of excise duty. Under Rule 173B every assessee is required to file with the proper officer a list of goods manufactured by him for approval and the proper officer shall after such inquiry as he deems fit approve the list with such modifications as are considered necessary and all clearances are to be made only thereafter. 9. A right of appeal is a creature of the statute. It is a substantive right. An order of the appellate authority is binding on the lower authority who is duty bound to implement the order of the superior authority. Refusal to carry out the direction will amount to denial of justice and destructive of one of the basic principles in the administration of justice based on hierarchy of authorities. 10. Coming to the question that is raised there is little scope for doubt that in a case where an adjudicating authority has passed an order which is appealable under the statute and the party aggrieved did not choose to exercise the statutory right of filing an appeal, it is not open to the party to question the correctness of the order of the adjudicating authority subsequently by filing a claim for refund on the ground that the adjudicating authorit....
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....annot also review an assessment order." (emphasis supplied) 15. Learned counsel for the respondent would contend that the view of the Hon'ble Supreme Court in Priya Blue Industries Ltd's case, is not correct, in view of the judgment rendered by a Bench of three Judges in KARNATAKA POWER CORPORATION LTD Vs. COMMISSIONER OF CUS (APPEALS), CHENNAI {2002 (143) ELT 482 (SC). Order being a short one is being extracted in its entirety. "The order under challenge was passed by the Customs, Excise and Gold (Conrol) Appellate Tribunal in the following circumstances: The appellants imported epoxy coils to use in two generators of a hydro-electric power station belonging to them. The respondents classified the epoxy coils under Tariff Entry 8544.11. The customs duty so determined was paid. Therefore, the appellants made a formal application for re-assessment of the duty and for refund of a part of the duty paid on the ground that th epoxy coils ought properly to have been classified and assessed under Entry 8501.64. This application remained pending until, on 27th August, 1994/25th August, 1994, the appellants addressed letters to the Assistant Co....
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....m of the appellants contained in the letters dated 27th August, 1994/25th August, 1994. 3. Orders on the appeals accordingly." 16. A perusal of the said order in KARNATAKA POWER CORPORATION LTD's case, would show that the Hon'ble Supreme Court has not over ruled the judgment rendered in Flock's case, referred to supra. Further, there was a separate challenge to the classification in that case, unlike the present case, where there is no separate challenge. This judgment also cannot be an authority for the proposition that, when the order which is an appealable order is not challenged at all, even then, the same order can be questioned, in a 17 refund application. The fact that the appellant herein had paid the duty under protest, does not mean that they could raise the same question, in a refund application. The Central Excise Act, 1944, provides for an appeal against the order of the Adjudicating Authority. Once an assessee choses not to file an appeal, then, he cannot challenge the same, in a collateral proceedings. In this view, order, dated 4/7/2013, dismissing the Referred Case Petition No.2 of 2012, needs to be reviewed. 17. Revenue had challenged....
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.... While setting aside the orders of the assessment authority and the appellate authority, the Tribunal has applied the Doctrine of Merger, which is not applicable to the facts of this case. Tribunal has not stated precisely, as to how, the Doctrine of Merger, is applicable in this case. The Tribunal has not stated, as to which order has merged into which order and as to why the appeal before it was allowed by applying the Doctrine of Merger. No doubt, order dated 24/3/2004 had not been challenged, at the first instance and was challenged only much later by filing a Reference Petition No.2 of 2012. It is also not clear, as to whether the Tribunal, applied Doctrine of Merger, since the order dated 31/3/2004, passed by the Commissioner (Appeals) in order in Appeal No.269 of 2004 was not challenged. The Doctrine of Merger would not apply, even if the order dated 31/3/2004, passed by the Commissioner (Appeals), in order in Appeal No.269 of 2004 was not challenged. Order, dated 31/3/2004 only remanded the matter once again and directed the refund claim to be processed as per law, on merit. The operative portion of the order reads as under:- "7. In view of the above I allow the ap....
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.... by the appellate authority the original decision merges in the appellate decision and it is the appellate decision alone which subsists and is operative and capable of enforcement;" 9. In State of Madras v. Madurai Mills Co. Ltd.AIR 1967 SC 681, this Court held that the doctrine of merger is not a doctrine of rigid and universal application and it cannot be said that wherever there are two orders, one by the inferior authority and the other by a superior authority, passed in an appeal or revision there is a fusion or merger of two orders irrespective of the subject-matter of the appellate or revisional order and the scope of the appeal or revision contemplated by the particular statute. The application or the doctrine depends on the nature of the appellate or revisional order in each case and the scope of the statutory provisions conferring the appellate or revisional jurisdiction. 11. In S.S. Rathore v. State of M.P.AIR 1990- SC 10, a larger Bench of this Court (seven Judges) having reviewed the available decisions of the Supreme Court on the doctrine of merger, held that the distinction made between 23 courts and tribunals as regards the applicability ....
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....ch proceedings the order or judgment is passed by the superior court determining the rights of parties, it would supersede the order or judgment passed by the inferior court. The juristic justification for such doctrine of merger is based on the common law principle that there cannot be, at one and the same time, more than one operative order governing the subject-matter and the judgment of the inferior court is deemed to lose its identity and merges with the judgment of the superior court. In the course of 25 time, this concept which was originally restricted to appellate decrees on the ground that an appeal is continuation of the suit, came to be gradually extended to other proceedings like revisions and even the proceedings before quasi-judicial and executive authorities. 12. This Court in State of Madras v. Madurai Mills Co. Ltd. AIR (1967) SC 681 observed as under: (AIR Headnote) "The doctrine of merger is not a doctrine of rigid and universal application and it cannot be said that wherever there are two orders, one by the inferior authority and the other by a superior authority, passed in an appeal or revision, there is a fusion or merger of two orders irres....
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....ed or reiterated the reasoning, or recorded an express approval of the reasoning, incorporated in the judgment or order of the subordinate forum. 11. Secondly, the doctrine of merger has a limited application. In State of U.P. v. Mohd. Nooh, AIR (1958) SC 86, the Constitution Bench by its majority speaking through S.R. Das, C.J. so expressed itself, "while it is true that a decree of a court of first instance may be said to merge in the decree passed on appeal therefrom or even in the order passed in revision, it does so only for certain purposes, namely, for the purposes of computing the period of limitation for execution of the decree" (AIR p. 95, para 13). A three-Judge Bench in State of Madras v. Madurai Mills Co. Ltd,AIR (1967) SC 681, held: (AIR pp. 683-84, para 6) The doctrine of merger is not a doctrine of rigid and universal application and it cannot be said that wherever there are two orders, one by the inferior authority and the other by a superior authority, passed in an appeal or revision, there is a fusion or merger of two orders irrespective of the subject-matter of the appellate or revisional order and the scope of the appeal or r....
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....on to the rule of precedents. "A decision passes sub silentio, in the technical sense that has come to be attached to that phrase, when the particular point of law involved in the decision is not perceived by the court or present to its mind." A court is not bound by an earlier decision if it was rendered "without any argument, without reference to the crucial words of the rule and without any citation of the authority". A decision which is not express and is not founded on reasons, nor which proceeds on consideration of the issues, cannot be deemed to be a law declared, to have a binding effect as is contemplated by Article 141. His Lordship quoted the observation from B. Shama Rao v. Union Territory of Pondicherry,[1967] 2 SCR 650, "it is trite to say that a decision is binding not because of its conclusions but in regard to its ratio and the principles, laid down therein". His Lordship tendered an advice of wisdom - "Restraint in dissenting or overruling is for sake 30 of stability and uniformity but rigidity beyond reasonable limits is inimical to the growth of law." (SCC p. 163, para 41)." 26. The conclusion of CESTAT, Madras, is that the order of the Appellate Authority ha....