Alkem Laboratories LTD. vs. The Union Of INDIA Through The Secretary And Anr.

Held

The Court held that the impugned order dated July 26, 2018, passed by the Additional Commissioner, Central GST Commissionerate, Daman, was contrary to the directions of the Tribunal in its order dated July 17, 2015. The Court noted that it was an agreed position between the parties that the Additional Commissioner's order went beyond the limited remand order of the Tribunal, which was only for quantifying the CENVAT Credit entitlement based on the final products cleared by the sister concern on payment of excise duty. Instead, the impugned order re-adjudicated the issue afresh on merits. Therefore, the Court set aside the impugned order. The issue of determining the quantification of CENVAT Credit available to the Petitioner was restored to the Additional Commissioner for fresh determination in accordance with the directions in the Tribunal's order dated July 17, 2015. The ratio decidendi is that an authority acting in pursuance of a remand order must strictly adhere to the scope and directions of that remand order and cannot re-adjudicate issues that were not part of the remand.

Facts

The Petitioner, Alkem Laboratories Ltd., challenged an order dated July 26, 2018, passed by the Additional Commissioner, Central GST Commissionerate, Daman. This order confirmed a demand of Rs. 21.85 lakhs of CENVAT Credit and imposed an equivalent penalty. The demand was based on the premise that the Petitioner was not entitled to CENVAT Credit for duty paid on Furnace Oil used to generate steam supplied to its sister concern. The impugned order followed a Tribunal order dated July 17, 2015, which had itself relied on a prior bench order for an earlier period. The Tribunal had held that the Petitioner was entitled to CENVAT Credit on Furnace Oil used for steam generation but remanded the issue of whether the final products of the sister concerns were cleared on payment of duty to the Assessing Officer for quantification. It was an agreed position that the impugned order went beyond the limited remand by re-adjudicating the merits.

Key Issues

1. Whether the impugned order dated July 26, 2018, passed by the Additional Commissioner, Central GST Commissionerate, Daman, is contrary to the directions of the Customs, Excise & Service Tax Appellate Tribunal (Tribunal) in its order dated July 17, 2015? (Question of law). Petitioner's contention: The Petitioner argued that the impugned order was passed contrary to the specific directions of the Tribunal's remand order dated July 17, 2015. The Tribunal had only directed a limited remand for quantification of CENVAT Credit based on the final products cleared by the sister concerns on payment of duty. However, the impugned order re-adjudicated the issue on merits, thereby exceeding the scope of the remand. Revenue's contention: The Revenue did not appear to have made any specific arguments against the Petitioner's contention regarding the scope of the remand order. The judgment notes an agreed position between the parties that the impugned order went beyond the remand.