2023-VIL-876-CESTAT-MUM-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - Majority Order - Cash refund of accumulated Modvat/Cenvat credit in the case of closure of factory – Dismissal of SLP of Revenue against the decision of the Hon’ble Karnataka High Court in the case of Slovak India Trading Co. Pvt. Ltd – Doctrine of merger - Whether the decision of the Hon’ble High Court of Karnataka in case of Slovak India Trading Co Pvt, and affirmed by the Hon’ble Supreme Court, is applicable to the facts of the case in hand as held by Member (Judicial); or The decision of the Hon’ble Karnataka High Court is clearly distinguishable and not applicable to the facts of the case as held by Member (Technical) – HELD - Hon’ble Karnataka High Court upheld the views of the Tribunal and had recorded the findings that there is no express prohibition for refund in terms of Rule 5 of Cenvat Credit Rules, 2004 - The said judgement of the Hon’ble Karnataka High Court was challenged by the Union of India by way of filing of Special Leave Petition before the Hon’ble Supreme Court - On reading of the judgement of Hon’ble Supreme Court, it is amply made clear that the issue regarding cash refund of accumulated Modvat/Cenvat credit, in the case of closure of factory was appreciated by the Hon’ble Court and upon consideration of various decisions rendered by the Tribunal, in allowing such refunds, the consent made by the ld. ASG to such extent was accepted and accordingly, the SLP was dismissed. Further, it is an admitted fact on record that the decisions of the Tribunal referred to by the Hon’ble Supreme Court have not been appealed against by the Revenue, meaning thereby that the principles or the issue dealt with and decided by the Tribunal were accepted by the Revenue – Therefore, it cannot be said that the Hon’ble Supreme Court had dismissed the SLP in case of Slovak India Trading Co. Pvt. Ltd., without assigning any reasons therein – once the SLP is dismissed, giving reasons by the Hon’ble Supreme Court, however meagre (one sentence), it becomes a declaration of law. Thereafter, the decision which is merged with the decision of Hon’ble Apex Court, is non-existent, and thus, cannot be reviewed - the ratio of the judgment by the Hon’ble Supreme Court in Slovak India Trading Co. Pvt. Ltd., has the binding effect on all Courts, Tribunal etc., in view of the mandates, contained in Article 141 of the Constitution of India - availment of cenvat credit is an indefeasible right of an assessee and such right conferred under the statue cannot be taken away on the ground of limitation – the limitation aspect would not apply to the facts of the present case for denial of the refund benefit to the appellant - in agreement with the Ld. Member (Judicial) that the impugned order is required to be set aside and the appeal is required to be allowed with consequential benefit to the appellant – answered in favour of assessee - Doctrine of merger – HELD - Hon’ble Apex Court, while delivering the judgment in case of Gangadhara Palo, have referred to and relied upon the earlier judgment delivered in the case of Kunhayammed Vs. State of Kerala, but have interpreted the legal position with regard to the doctrine of merger, holding that when a SLP is dismissed, without assigning any reason, then in that case, it cannot be inferred that the judgment of High Court has merged with the Judgment of the Hon’ble Apex Court. At the same time, it was also held that when a SLP is dismissed with reasons, even if by recording only one sentence, then the judgment of the High Court can be said to be merged with the judgment of Hon’ble Supreme Court - the judgement of Hon’ble Supreme Court in the case of Gangadhara Palo, was not placed by the counsel from either side before the Hon’ble Bombay High Court, while deciding the appeal in the case of Gauri Plasticulture Pvt. Ltd.; and therefore, the ratio of the judgment of Hon’ble Apex Court were not considered by the Hon’ble High Court, for a decision on the subject issue in the case of Gauri Plasticulture Pvt. Ltd. Therefore, it cannot conclusively be said that the decision of the Hon’ble Karnataka High Court in the case of Slovak India Trading Co. Pvt. Ltd. lacks value as a precedent and the contextual facts and circumstances must be examined
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