Board Asks Field Officers Once Again to Implement High Court Orders without Demur

[CBEC Instruction dated 26^th June 2014]

Subject – Instructions regarding need to follow Judicial discipline in adjudication proceedings.

Kind attention is invited to the order of Hon’ble High Court of Gujarat at Ahmedabad in case of M/s E. I. Dupont India Pvt Ltd (hereinafter referred to as M/s Dupont) in Special Civil Application no 14917 to 14921 of 2013 dated 25-10-2013 [2013-TIOL-1172-HC-AHM-CX]. M/s Dupont had filed appeal before the Hon’ble High Court against rejection of a refund claim on an issue which had earlier been decided by the Hon’ble High Court against the revenue, though in a matter relating to a different assessee. Thus for deciding the refund, a binding precedent judgment existed.

2) However the binding precedent was not followed which led to litigation before the Hon’ble High Court to which Hon’ble High Court took a serious view. It may be noted that on the subject of consequential refund, where the department has gone in appeal, there already exists a circular no 695/11/2003 –CX dated 24-02-2003. This circular of the Board is binding on all field officers. Had this circular been followed in the case, unnecessary litigation as well as adverse observation of the Hon’ble High Court could have been avoided. This circular is once again brought to the notice of field officers with direction that it is followed scrupulously.

3) The judgment of Hon’ble High Court in M/s Dupont case (supra) under reference may be perused by the field officers for complete understanding of the issues involved and directions of the Hon’ble High Court on need to follow judicial discipline. Judgment of the Hon’ble Supreme Court in case of Union of India vs. Kamlakshi Finance Corporation Ltd. [1991 (55) E.L.T. 433 (S.C.) = 2002-TIOL-484-SC-CX-LB] may also be perused as this is an authoritative pronouncement on the issue and has also been cited

by the Hon’ble High Court.

4) The contents of this instruction may be brought to the notice of all adjudicating authorities under your jurisdiction with direction to follow the same scrupulously.

F. No. 201/01/2014-CX.6

[CBEC Circular No. 695 dated 24^th February 2003]

Subject: Central Excise and Customs – Disposal of refund/rebate claims where Special Leave Petition/Civil Application along with stay application is pending at Supreme Court – regarding.

I am directed to refer to clauses (1) and (2) of Board’s Circular No.572/9/2001-CX dated 22.02.2001 which interalia provides that in cases where the Department has filed Special Leave Petition/Civil Application along with stay application against the adverse order of High Court/CEGAT as the case may be, no unilateral action should be taken by the Commissioners to release goods/order refund and decision in such cases where stay order is not forthcoming, should be taken only in consultation with the Board. In this connection, a number of references from field formations have been received.

2. Board has examined the matter. It is observed that the above guidelines requiring consultation with Board in such cases dilute the legal position that the order of High Court/Tribunal should be implemented unless a stay has been obtained from the higher judicial forum on the implementation of the order. Further, consultation with Board in such cases may cause into delay in finalisation of the refund claims. Accordingly, Board has decided to permit jurisdictional Commissioners to take decision in such cases on merits at their level to grant refund or release goods without seeking permission/clearance from the Board. However, in the matters concerning Supreme Court, the jurisdictional Commissioners should continue to pursue with the Board for early disposal of stay application.

3. Board’s Circular bearing No.572/9/2001-CX dated 22.02.2001 stands modified to the above extent.

4. Field formations may please be informed suitably.

5. Receipt of the same may please be acknowledged.

6. Hindi version will follow.

F.No.268/38/2002-CX.8