TaxTMI 
TaxTMI 
2021 (10) TMI 484
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.... No.232/2021 Writ Appeal No.233/2021 Writ 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.,....
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....e Notifications granted exemption in respect of all excisable 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....
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....before the learned Single Judge are such industrial units which are duly registered with the Central Excise Authority 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 ....
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....n terms of the Finance Act, 2004, as already referred above. The case of the petitioners (manufacturers) was that Education Cess and Higher Education Cess was part 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 ce....
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....ove excise duty. This judgment was not considered by the Court in M/s SRD Nutrients Private Limited and the view taken in M/s SRD Nutrients Private Limited was thus contrary 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 ....
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....rned Single Judge was as follows:- "(I) That the refund of Education Cess and Secondary and Higher Education Cess which was granted to the petitioners was on the basis of law laid down by the Apex Court in the case of SRD 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 Exci....
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....t already been done when the said judgment was a good law cannot be held to be done due to misrepresentation or has been done erroneously or by any fraud. It was also held that the refund was made by judgment of the Hon'ble Apex Court in M/s SRD 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 Nut....
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.... the Revenue has its powers to recover duties which have been erroneously refunded. These powers are there under Sub-Section (i) of Section 11A of the Central Excise Act, where in case an amount had been refunded, inter alia 'erroneously', it can be recollected. 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 ....
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.... lis where the precedential value of the decision is called in question. No one can dispute that in our judicial system it is open to a court of superior jurisdiction or strength before which a decision of a Bench of lower strength is cited as an authority, to overrule 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 ....
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....doubt the view of the Apex Court expressed In Pine Chemicals case 1992 (2) SCC 683 was reversed by the Apex Court itself in 1995 (1) SCC 58, but according to us that should not make any difference on the assessments already completed. On similar matter a Division Bench of Punjab & 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 St....
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.....P. filed by the revenue was dismissed on 3.3.1997 (S.L.P. No. C 5644 of 1997). Thereafter the revenue filed a review petition No. 1370/97 before the Apex Court on the ground that the judgment reported in 1992 (2) SCC 683 (supra) already stood reviewed and reversed in the case reported in 1995 (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 ba....
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...., that Articles 16(4), (4A) and (4B) are exhaustive of all forms of reservation, stands overruled by this order, the question which necessitates examination is regarding the effect of the said order of the Division Bench, in Special Appeal No.162 of 2013 dated 14.08.2013, declaring the Government Order dated 06.10.2006, 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 pa....
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.... Government Order dated 06.10.2006 and in holding it non est, cannot be set at naught in collateral proceedings even by a Larger Bench." 31. Ms. N Hawelia, learned counsel for the respondents would also argue that there are department circulars reference to which has been made in Paragraph No.69 of the judgment of the learned Single Judge which are binding on the department in view of Section 37B^1 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....