TaxTMI 
TaxTMI 
2021 (10) TMI 484
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....it Appeal No.234/2021 Writ Appeal No.235/2021 Writ Appeal No.242/2021 Writ Appeal No.243/2021 Writ Appeal No.244/2021 Writ Appeal No.245/2021 Writ Appeal No.246/2021 The Union of India And 4 Ors, The Secretary To The Govt. of India Ministry of Commerce And Industry New Delhi, The Commissioner GST And Central Excise GST Guwahati, Asst. Commissioner GST And Central Excise Office Of The Assistant Commissioner Of Central Excise, Guwahati, The Superintendent GST And Central Excise Tech-I Guwahati, The Joint Commissioner, Superintendent (Technical-I) CGST And Central Excise Division-I Versus M/s. Keshari Industries, M/s. Topcem India, M/s. Digboi Carbon Pv. Ltd., Pan Parag India Ltd. (Formerly- Kothari Products Limited), Assam Carbon Products Limited, M/s. Brahmaputra Carbon Ltd., M/s. Jumbo Packaging Industries, M/s. Barak Alloy, M/s. Ozone Ayurvedics, M/s. Shandar Paints Industry(Unit-II), K.D Cements, Bulland Cement Pvt Ltd, Prag Electricals Pvt. Ltd., K.D Cokes, M/s. Purbanchal Cement Ltd., M/s. India Carbon Ltd. M/s. Guwahati Carbon Limited, North East Roofing (P) Ltd., Ozone Pharmaceuticals Ltd., M/s. Kamlang Saw And Veneer Mills Pvt. Ltd., M/s. New Age Petcoke Pvt. Ltd. Assam Roo....
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....xcisable goods cleared from a unit located in the growth or Integrated Infrastructure Development Centre or Export Promotion Industrial Park or Industrial Estates or Industrial area or Commercial Estate, as the case may be, in the North East. The exemption was applicable to all new industrial units which had commenced their commercial production on or after 24.12.1997, or to an industrial unit which had "substantially extended" its production after the said date, i.e. 24.12.1997. In continuation of this policy the Government had announced in the year 2007 that there will be a 100% excise duty exemption on finished products made in the North Eastern Region. In terms of that promise, the Government of India vide Notification No.20/2007 dated 01.04.2007 had declared the North East Industrial and Investment Promotion Policy (NEIIPP), 2007. This conferred benefits in terms of the promise made earlier. 5. The Notification dated 01.04.2007 was issued by the Government of India through its Ministry of Commerce & Industry, which granted a tax holiday to industries in the North-East in the shape of income tax as well as excise duty, for a period of ten years. Certain industries which were i....
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....ority in accordance with the provisions of Central Excise Act, 1944 and they had been paying excise duty. 8. It may also be mentioned at this juncture that by the Finance Act, 2004, the Parliament levied Education Cess on certain goods specified in the First Schedule of the Central Excise Tariff Act, 1985, and the Education Cess was to be calculated @ 2% of the aggregate of all duties of excise. The provision regarding Education Cess made in Section 91 to 93 of the Finance Act, 2004 are reproduced below: "91. Education Cess. - (1) Without prejudice to the provisions of sub-section (11) of section 2, there shall be levied and collected, in accordance with the provisions of this Chapter as surcharge for purposes of the Union, a cess to be called the Education Cess, to fulfil the commitment of the Government to provide and finance universalisd quality basic education. (2) The Central Government may, after due appropriation made by Parliament by law in this behalf, utilise, such sums of money of the Education Cess levied under sub-section (11) of section 2 and this Chapter for the purposes specified in subsection (1), as it may consider necessary. 92. Definition. - The words and....
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....art of excise duty and since they have been exempted from excise duty they are also liable to be exempted from paying Education Cess and Higher Education Cess and as excise duty has been returned to them, the amount paid by them as Education Cess and Higher Education Cess is also liable to be returned to them. 11. The Revenue, however, did not agree to this logic. Later, however, the matter reached the Hon'ble Apex Court (M/s SRD Nutrients Private Limited -Vs- Commissioner of Central Excise, Guwahati (2018) 1 SCC 105), which was a case relating to the present cases which reached the Hon'ble Apex Court after the matter had travelled CESTAT as well as the High Court. The opinion of the Hon'ble Supreme Court was as under: "22. Even otherwise, we are of the opinion that it is more rational to accept the aforesaid position as clarified by the Ministry of Finance in the aforesaid circulars. Education cess is on excise duty. It means that those assessees who are required to pay excise duty have to shell out education cess as well. This education cess is introduced by Sections 91 to 93 of the Finance (No. 2) Act, 2004. As per Section 91 thereof, education cess is the surcharge which the....
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.... to the view taken by the Three Judge Bench in M/s Modi Rubber Limited and, therefore, it was held that the view taken in M/s SRD Nutrients Private Limited is "per incuriam". The observations of the Hon'ble Apex Court in M/s Unicorn Industries reads as under: "51. Thus, it is clear that before the Division Bench deciding SRD Nutrients (P) Ltd. [SRD Nutrients (P) Ltd. v. CCE, (2018) 1 SCC 105] and Bajaj Auto Ltd. [Bajaj Auto Ltd. v. Union of India, (2019) 19 SCC 801 : 2019 SCC OnLine SC 421], the previous binding decisions of the three Judge Bench in Modi Rubber Ltd. [Union of India v. Modi Rubber Ltd., (1986) 4 SCC 66 : 1986 SCC (Tax) 781] and Rita Textiles (P) Ltd. [Rita Textiles (P) Ltd. v. Union of India, 1986 Supp SCC 557 : 1987 SCC (Tax) 87] were not placed for consideration. Thus, the decisions in SRD Nutrients (P) Ltd. [SRD Nutrients (P) Ltd. v. CCE, (2018) 1 SCC 105] and Bajaj Auto Ltd. [Bajaj Auto Ltd. v. Union of India, (2019) 19 SCC 801 : 2019 SCC OnLine SC 421] are clearly per incuriam. The decisions in Modi Rubber Ltd. [Union of India v. Modi Rubber Ltd., (1986) 4 SCC 66 : 1986 SCC (Tax) 781] and Rita Textiles (P) Ltd. [Rita Textiles (P) Ltd. v. Union of India, 1986 ....
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....RD Nutrients (supra) which was prevailing at that point in time, and therefore, it cannot be said to be erroneous refund simply on the ground that the Apex Court in the subsequent decision rendered in M/S Unicorn Industries (supra) held that judgment passed by the Apex Court earlier in SRD Nutrients Pvt. Ltd. (supra) to be per incuriam. (ii) As the refunds granted to the petitioners was in terms of the law laid down by the Apex Court in the case of SRD Nutrients (supra) prevailing at the relevant point in time, cannot be held to be erroneous and, therefore, the impugned demand-cum-show cause notices issued by the Department under Section 11A of the Central Excise Act is without jurisdiction. (iii) That the binding effect of any judgment rendered will not be reversed or effected even if the said judgment is overruled and/or held to be per incuriam by a subsequent judgment as the refund granted to the petitioners were made by the Central Excise Department in terms of the judgment rendered by the Apex Court in SRD Nutrients which was the law prevailing at the relevant point in time. The said judgment being held to be per incuriam by later judgment will not alter the binding effect....
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....Nutrients Private Limited as well as by different orders passed by this Court in favour of the petitioners. These orders have not been revoked. Therefore, the revenue cannot now take recourse for recovery of these amounts. Even the judgment given by the Hon'ble Apex Court in the case of M/s SRD Nutrients Private Limited, against which a review was filed and the review petition itself was dismissed, there was no curative petition and it was only a subsequent judgment that this judgment was declared as per incuriam. 18. The writ petitions were allowed and the show cause notice given to the petitioners were quashed by the learned Single Judge. Aggrieved by the order of the learned Single Judge, the Revenue, i.e. Excise Department, has filed these appeals. 19. Before opening his argument, Mr. S.C. Keyal, learned counsel for the appellants gave a statement before the Court that the Revenue had earlier filed a review petition in M/s SRD Nutrients Private Limited, which was dismissed on 10.07.2018. Thereafter, another petition was filed before the Hon'ble Apex Court and the Apex Court has vide order dated 27.09.2021 referred the matter to a larger Bench and, therefore, in view of this f....
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....ected. It is further argued that the said amount can be recovered within a period of two years from the date such an amount was paid and the admitted position is that this is being done within the said limitation of two years. A three-Judge Bench of the Hon'ble Supreme Court in M/s Unicorn Industries has come to the conclusion that the judgment of the Supreme Court in M/s SRD Nutrients Private Limited is per incuriam for the reason that two earlier decisions of the Hon'ble Supreme Court in M/s Modi Rubber Limited and Rita Textiles Private Limited Pvt. Limited & Ors. -Vs- Union of India & Ors. (1986) (Supp) SCC 557 were not considered where it was held that an excise duty is only the basic duty of excise. Anything over and above the basic duty of excise, such as special duty, cannot be called an excise duty and what can be refunded is only the excise duty and not any other duty. Consequently, the refund made to the petitioners was made "erroneously" and since the Revenue has the power to take back the amount refunded "erroneously", as these powers are conferred under Section 11A of the Central Excise Act, the same have been exercised and the amount is being now recovered. 23. Rebut....
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....le it. This overruling would not operate to upset the binding nature of the decision on the parties to an earlier lis in that lis, for whom the principle of res judicata would continue to operate........." 25. Another judgment cited by the learned senior counsel for the respondents is the judgment of the Hon'ble Apex Court in Dr. Shah Faisal & Ors. -Vs- Union of India & Anr. (2020) 4 SCC 1. In the said case, the Hon'ble Supreme Court inter alia was considering a challenge as regarding two constitutional orders issued by the President of India in exercise of his powers under Article 370 of the Constitution of India. While giving the said order, the consideration which had come before the Hon'ble Supreme Court was whether the matter has to be referred to a larger Bench or not. While deciding on the said aspect, the Hon'ble Apex Court again had an occasion to consider the net result when an earlier judgment is declared as per incuriam. Giving a reference to the case of A.R. Antulay -Vs- R.S. Nayak (1988) 2 SCC 602, the Hon'ble Apex Court had held that "when a previous decision is so overruled it does not happen - nor has the overruling Bench any jurisdiction so to do - that the final....
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....& Haryana High Court in 107 STC 332 observed as under : '4. From the perusal of Section 40 as reproduced above, it would be apparent that the Commissioner can call for the record of any case pending before or disposed of by any Assessing Authority or appellate authority to satisfy himself as to the legality or propriety of any proceedings or any order and pass such order in relation thereto as he may think fit. The Scope of revisional powers is, thus, only to examine legality or propriety of any proceedings or any order. That being the scope of the revision, the only question that, thus, needs determination is as to whether the appellate authority while accepting the appeals preferred by M/s. Free Wheels (India) Limited as on the day when the appeals were decided had committed any illegality or the orders suffered from any impropriety. All that is stated on behalf of the counsel representing the State of Haryana is that the appellate authority had based its decision on the decision of the Tribunal in M/s. Liberty Footwear Co., Kamal, which decision could not be held to be laying down the correct law in view of the later decision rendered by the Tribunal in M/s. Steel Kraft, Panip....
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.... (1) SCC 58 and therefore the order passed in the S.L.P. dated 3.3.1997 may be reviewed. 11. However, the Apex Court dismissed the review petition on 13.7.1997. From this the learned counsel emphasised that the law as it exists on the date of passing of the order has to be seen and the judgment reported in 1995 (1) SCC 58 would be applicable only to the assessments which are made after the date of the judgment. According to the learned counsel, the law laid down in fiscal matters has to be applied prospectively. 12. From the above, it can reasonably said that despite the fact that it was brought to the notice of the Apex Court that the earlier view expressed in 1992 (2) SCC 683 stood reversed in 1995 (1) SCC 58; yet the Apex Court did not review the order passed in the SLP inasmuch as the Division Bench judgment of this High Court in Mahavir Coke Industries case was on the basis of the then existing law i.e., 1992 (2) SCC 683 and could not be said to be wrong just because later on that view was upset in 1995 (1) SCC 58. We agree with the learned counsel that law laid down in Tax matters should normally be applied prospectively. No tax was collected by the appellant from the pur....
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.... whereby reservation was provided in favour of sportsmen, non est and that no right flowed therefrom. 23. In examining this issue, the distinction between the law laid down in the earlier judgment being declared erroneous, and the decision itself being overruled, must be borne in mind. An order passed by a Court of competent jurisdiction, after adjudication on merits of the rights of the parties, binds the parties or the persons claiming right, title or interest from them. Its validity can be assailed only in an appeal or review. Its validity cannot be questioned in subsequent proceedings. (Sushil Kumar Metha Vs. Gobind Ram Bohra). The judgment of a competent Court, even if it is erroneous, is binding inter- parties and cannot be re-agitated in collateral proceedings. The binding character of judgments, of Courts of competent jurisdiction, is in essence a part of the rule of law on which administration of justice is founded. (The Direct Recruit Class- II Engineering Officers' Association and others vs. State of Maharashtra and others; U.P. State Road Transport Corporation vs. State of U.P. and Anr.). Once a matter, which was the subject-matter of a lis, stood determined by a ....
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....which are binding on the department in view of Section 37B1 of the Central Excise Act. Reference here is of the Circular dated 09.01.2020. As per the said Circular, the Board has instructed its officer to contest matters pending before this Court by filing statutory appeal or review petition, as the case might be, or in the alternative, submit a proposal for filing a SLP before the Hon'ble Apex Court. In other words, before initiating recovery proceedings, as it has been done in the present case, these remedies ought to have been exhausted as this Circular is binding upon the authority. It is true that we have not received any satisfactory answer from the Union of India as to why this Circular has not been followed. 32. Mr. R. Chowdhary, learned counsel who appears for the respondents in W.A. No. 170/2021, W.A. No. 201/2021 and W.A. No. 213/2021, though has adopted the arguments of Dr. Saraf, would also argue that the decision in M/s SRD Nutrients Private Limited is binding between the parties and until the said judgment is set aside, even the show cause notice which has been given to the respondents by the Revenue is without jurisdiction. 33. To summarize the basic argument of t....