TaxTMI 
TaxTMI 
2018 (11) TMI 1478
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....1.2000. 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 the Adjudicating Authority for processing the re....
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....3.2004 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 submit as under:- 1.The Bill of Entry is an assessment order and if there is any disagreement with the classificatio....
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....ff 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 if a speaking order is not passed, it would be contrary to the principles of Natural Justice. g. It was contended that the assessing authority did not give any reasons, in its order, dated 02.05.2000, learne....
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....onsidered 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 authority had committed an error in passing his order. If this position is accepted then the provisions for adjudication in the Act and the Rules, the provision for appeal in the Act and the Rules will lose their relevance and the entire exercise will be rendered redundant. Thi....
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....NATAKA 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 Collector of Customs in regard to that application. In the letter dated 27th August, 1994, They stated: "Vide our claim letter dt.17-9-90 we had requested to re-classify the apoxy coils and accessories under heading 8501.64/9801. The case has not come for hearing till to date. Further, we wish to state that after d....
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....urther, 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 the order, dated 24/4/2003, passed by the Tribunal in F.O.No.291/2003, on the ground that the Tribunal was not correct in relying on the judgment of Karnataka Power Corporation Ltd., Vs. Commissioner of Cus (Appeals), Chennai, stated supra, and that the judgment of the Hon'ble Supreme Court in Collector of Central Excise, Kanpur Vs. Flock (Ind....
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.... 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 appeal by setting aside the Order-in-Original with the end result that the refund claim should be processed, as per law, on merit and if found refundable the payability to the appellant should be decided after ruling out unjust enrichment." 21. Order dated 31/3/2004 only directed the refund claim should be processed, as per law, on merit and if it was found refundable, then it should ....
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....e 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 of doctrine of merger is without any legal justification; where a statutory remedy was provided against an adverse order in a service dispute and that remedy was availed, the limitation for filing a suit challenging the adverse order would commence not from the date of the original adverse order but on the date when the order of the higher authority disposing of the statutory remedy was passed. Support was taken from doctrine of m....
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....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 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 of 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." 25. In S. Shanmugavel Nadar v. State of T.N., (2002) 8 SCC 361, the Hon'ble Supreme Court has observed as under:- 7. When th....
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....assed 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 revision contemplated by the particular statute. The application of 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. Recently a three-Judge Bench of this Court had occasion to deal with the doctrine of merger in Kunhayammed v. State of Kerala,(2000) 6 SCC 359,and this Court reiterated that the doctrine of merger is not of universal or unlimited application; the nature of jurisdiction exercised ....
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....eemed 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 had merged with the order of the Tribunal passed earlier, is not correct. The order, dated 24/4/2003, has been set aside by us. In any event, the Tribunal did not lay down the correct position of law. An erroneous judgment, cannot definitely bind the superior Courts, from correcting them. It cannot be said that there was a fusion of the order dated 29/10/2003 passed by the Adjudicating Authority with the order dated 31/3/2004 passed by the Appellate Authority, and the Doctrine of Merger is applicable. In fact, it was only a remand order. No finalit....