The Sikkim High Court has alomost slapped Rs. 20K on CGST Commissioner for not following Supreme Court’s decision and filing frivolous appeal.
The bench of Chief Justice Biswanath Somadder and Justice Meenakshi Madan Rai while expressing anguish remarked, “this statutory appeal is a classic example of an instance where precious and valuable time of the Court is lost because of the appellant choosing not to follow the law laid down by the Supreme Court which governs the field. The ratio of the decision rendered by the Supreme Court in the case of Commissioner of CGST and Central Excise (J and K) vs. M/s Saraswati Agro Chemicals Pvt. Ltd. rendered on 04th July, 2023, is squarely applicable in the facts of the instant case. Even then, this statutory appeal was filed by the Commissioner of Central Goods and Services Tax and Central Excise, Siliguri Commissionerate on 20th May, 2024. On that date (i.e. on 20th May, 2024), the judgement of the Supreme Court dated 04th July, 2023, was squarely governing the field.”
Background
The appellant, Commissioner of Central Goods and Services Tax and Central Excise, Siliguri Commissionerate filed the statutory appeal arising from a final order passed by the learned Customs, Excise and Service Tax Appellate Tribunal (CESTAT).
The tribunal noticed that when the Excise Officer passed the order of refund, he was applying the law laid down by the Supreme Court by virtue of Article 142 of the Constitution of India. The learned Tribunal proceeded to observe to the effect that the Excise Officer had no other choice but to follow the decision of the Supreme Court in M/s SRD Nutrients. Any other action on his part would have been wholly illegal.
The tribunal found that the order of refund thus was in consonance with the law declared by the Supreme Court at the time when he was passing the order. The Tribunal observed that in its view any subsequent change in the legal position would not permit him to invoke the powers of section 11A of the Central Excise Act, 1944. As is well settled, all legal proceedings on the date when are being decided by any Court, would be governed by the law laid down by the Hon’ble Supreme Court which prevails on such date.
The Tribunal allowed two appeals of the assessee and held that refund claims were sanctioned in the light of the decision of the Apex Court in the case of SRD Nutrients and the decision of the SRD Nutrients was overruled by the Apex Court in the case of Unicorn Industries, it does not mean that at the time of sanctioning of refund claim, the decision of the Apex Court in the case of SRD Nutrients was valid. As the decision of Apex Court in the case of SRD Nutrients during the period holding the field, in that circumstances, the refund claims were rightly sanctioned to the appellants as held by the High Courts in the Tripura Ispat vs. UOI, therefore, the show cause notice issued to the appellant is not sustainable.
Arguments
The department argued that the decision of the Supreme Court referred to and relied upon by the authority which sanctioned the refund claims of the respondent, being the case of M/s SRD Nutrients Private Limited. vs. Commissioner of Central Excise, Guwahatiwas subsequently overruled by the Supreme Court of India in the case of M/s Unicorn Industries vs. Union of India. The powers of the concerned authority to invoke the provisions of section 11A of the Act of 1944, for recovery of duty erroneously refunded, would have been very much permissible in the facts of the case.
Relevant Provisions – Refund Of Educational Cess
Section 11A of the of the Central Excise Act, 1944 revealed that it makes a distinction between the cases of duties of excise not having been levied, paid, short-paid or short-levied, erroneously refunded, for reasons of fraud, collusion or any mis-statement or suppression of facts or contravention of any provisions of the Act or Rules made with the intent to evade payment of duty.
In cases where any duty of excise has not been levied or short-levied or erroneously refunded for any reason other than the reasons of fraud or collusion, etc., the Central Excise Officer would, within two years from the relevant date, serve a notice on the person chargeable to the duty calling upon him to show cause why the amount specified in the notice along with interest not be recovered.
Sub-section (1) of section 11A thus authorises the Central Excise Officer to recover any duty of excise, besides others, which has been erroneously refunded. It is in this context that the term “erroneously refunded” assumes significance.
Conclusion – Cost On CGST Commissioner
The Court imposed a cost of Rs.20,000 upon the CGST Commissioner which shall be deposited with the Sikkim State Legal Services Authority within a fortnight.
The court considered the submission of the Deputy solicitor general that the appellant may be exempted for payment of cost on the assurance that in future any such frivolous appeal which takes away the valuable and precious time of the Court without considering the relevant judgement of the Supreme Court holding/governing the field, will not be filed by the appellant. The court refrained from imposing cost upon the appellant.
Case Title: Commissioner of Central Goods and Services Tax and Central Excise, Siliguri Commissionerate Versus M/s Alkem Laboratories Ltd.
Case No.: TAX APP. NO. 01 OF 2024
Date: 05/09/2024
Counsel For Appellant: Deputy Solicitor General of India Sangita Pradhan, assisted by Adv. Natasha Pradhan
Counsel For Respondent: Mahesh Raichandani, Ranjit Prasad
