Mere filing of appeal in Apex Court does not mean that the order of CESAT is not binding.

PJ/Case Laws/2012-13/1197

Case:-MARICO LTD. VERSUS UNION OF INDIA
Citation: -2012(282) E.L.T. 180 (Ker.)
Issue: -Mere filing of appeal in Apex Court does not mean that the order of CESAT is not binding.
Brief fact: - The petitioner is a manufacturer of coconut oil packed and sold in containers up to 200 ml. In this writ petition the petitioner challenges Ext. P8 circular issued by the Central Board of Excise and Customs, Ext. P9 letter issued by the Assistant Commissioner of Central Excise, Palakkad and Ext. P10 (b) show cause notice issued by the Commissioner of Central Excise, Customs and Service Tax, Calicut calling upon the petitioner to show cause why Central Excise duty should not be imposed on them along with penalty and interest. The petitioner challenges Exts. P8, P9 and P10(b) on the ground that in view of the binding decision of the Customs Excise and Service Tax Appellate Tribunal, a copy of which is on record as Ext. P7(b), the coconut oil in containers up to 200 ml manufactured by them is not chargeable with excise duty.
Respondent Contention:- The respondents have filed a statement contending inter alia that the department has filed Civil Appeal No. 16595 of 2009 in the Apex Court from Ext. P7(b) judgment, that the said appeal has been admitted and that it stands posted for hearing along with other connected appeals. The learned standing counsel appearing for the respondents submits that as Ext. P7(b) judgment has not attained finality, the respondents are entitled to levy and collect excise duty on the goods in question manufactured by the petitioner.
Reasoning of Judgment: A reading of Ext. P7(b) order indicates that coconut oil packed and sold in packages of capacity up to 500 ml is not liable to be charged with excise duty. The High Court of Gujarat has in Raymon Glues & Chemicals v. Union of India [2000 (117) E.L.T. 29] held that circulars and departmental clarifications issued by the department cannot operate when the field is occupied by a decision rendered by the Appellate Tribunal. A similar view has been taken by the High Court of Bombay in Century Rayon v. Union of India [2002 (142) E.L.T. 319]. In the light of the said decisions, with which I am in respectful agreement, the respondents cannot take the stand that they are entitled to depart from the stand taken by the Tribunal in Ext. P7 (b) order. Further, the Apex Court has not stayed the operation of the order of the Tribunal.

The High Court holds that the petitioner cannot be called upon to pay excise duty on the goods manufactured by them falling within the ambit of Ex. P7(b) order. Accordingly High Court dispose of this Writ petition with the direction that right of the parties will be governed by Ext. P7(b) order subject to the outcome of the appeals filed by the department in the Apex Court. In the event of Apex court reversing the judgement, the right of the parties will be governed by the law laid down by Apex Court.

Decision:- Petition Disposed Off

Comment:- This is very good decision wherein it is clearly held that when the tribunal has already passed an order in the matter then it is binding on all lower formation. The department cannot contend that they have filed the appeal in Apex Court and hence the decision of tribunal has not attained finality and hence is not binding. Mere filing of appeal does not suspend the operation of that order unless the same is stayed or reversed by Higher Court.

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PJ/Case Laws/2012-13/1197

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