By TIOL News Service

NEW DELHI, NOV 20, 2014: THE assessee is a manufacturer of Printed Cork Tipping Paper (PCT). The process involves procurement of Cork Tipping Base Paper (CKT) including 'Other Uncoated Paper and Paper Board in rolls or sheets, including jumbo rolls of specified width and length. The jumbo rolls are first trimmed on their edges to remove torn portions and then printed in rotary printing machines with specific designs with the aid of non-toxic, non-poisonous & specially formulated food grade liquid printing ink. Thereafter the rolls are slit to the specified, required width.

Revenue view is that a new product emerged, which bears a different name, characteristic and classification i.e. Printed Cork Tipping Paper (PTC), classifiable under CETH No.4823 9014 and on which CE duty is payable.

SCN was issued and the Additional Commissioner, Delhi confirmed the duty liability of Rs.24,70,163 /- apart from interest and penalty.

The appellant had submitted before the adjudicating authority that in their own case the Tribunal had held that the process does not amount to manufacture so as to be charged to CE duty. However, the Addl. Commissioner observed that since the judgment of the Tribunal in the appellant's case was appealed before the Delhi High Court &the High Court had dismissed Revenue's appeal only on the ground of limitation and not on merits, the Tribunal decision had not attained finality; thus unworthy of efficacy as a binding precedent.

The Commissioner (A) too took a similar view and rejected the appeal filed by the assessee.

After hearing both sides, the CESTAT observed -

++ It is axiomatic that judgments of this Tribunal have precedential authority and are binding on all quasi-judicial authorities (Primary or Appellate), administering the provisions of the Act, 1944. If an adjudicating authority is unaware of this basic principle, the authority must be inferred to be inadequately equipped to deliver the quasi-judicial functions entrusted to his case. If the authority is aware of the hierarchical judicial discipline (of precedents) but chooses to transgress the discipline, the conduct amounts to judicial misconduct, liable in appropriate cases for disciplinary action.

++ It is a trite principle that a final order of the Tribunal, enunciating a ratio decidendi, is an operative judgment per-se ; not contingent on ratification by any higher forum, for its vitality or precedential authority. The fact that Revenue's appeal against the judgment of this Tribunal was rejected only on the ground of bar of limitation and not in affirmation of the conclusions recorded on merits, does not derogate from the principle that a judgment of this Tribunal is per se of binding precedential vitality qua adjudicating authorities lower in the hierarchy, such as a primary adjudicating authority or Commissioner (Appeals). This is too well settled to justify elaborate analyses and exposition, of this protean principle.

++ Nevertheless, the primary and the lower appellate Authorities in this case, despite adverting to the judgment of this Tribunal and without concluding that the judgment had suffered either a temporal or plenary eclipse (on account of suspension or reversal of its ratio by any higher judicial authority), have chosen to ignore judicial discipline and have recorded conclusions diametrically contrary to the judgment of this Tribunal. This is either illustrative of gross incompetence or clear irresponsible conduct and a serious transgression of quasi-judicial norms by the primary and the lower Appellate Authorities, in this case. Such perverse orders further clog the appellate docket of this Tribunal, already burdened with a huge pendency, apart from accentuating the faith deficit of the citizen / assessee, in departmental adjudication.

Noting that the Tribunal had in the appellant's case, on an earlier occasion, concluded in the assessees favour and which decision had followed an earlier decision in Lakshmi Packaging, and against which the Revenue appeal was dismissed by the Supreme Court, the Bench allowed the present appeal by quashing the concurrent orders of the primary authority and the Commissioner (Appeals).

This was not the end - the CESTAT observed that since the Authorities below had adjudicated against the assessee, despite and clearly contrary to the binding precedent and thereby subjected the assessee to an avoidable litigative trauma and the accompanying expenditure, the Revenue was directed to pay costs of Rs.10,000 /- to the appellant - assessee within one month.

The Registrar was also directed to communicate a Copy of the order to the CBEC and to the Secretary (Revenue), Ministry of Finance, Government of India, for information.

In passing: Also see 2012-TIOL-172-CESTAT-DEL & 2014-TIOL-2263-CESTAT-MUM.

(See 2014-TIOL-2305-CESTAT-DEL)