{"id":22401,"date":"2008-12-17T00:00:00","date_gmt":"2008-12-16T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/the-commissioner-of-central-vs-ms-godrej-boyce-mfg-co-ltd-on-17-december-2008"},"modified":"2017-09-12T04:43:54","modified_gmt":"2017-09-11T23:13:54","slug":"the-commissioner-of-central-vs-ms-godrej-boyce-mfg-co-ltd-on-17-december-2008","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/the-commissioner-of-central-vs-ms-godrej-boyce-mfg-co-ltd-on-17-december-2008","title":{"rendered":"The Commissioner Of Central … vs M\/S.Godrej & Boyce Mfg. Co. Ltd. on 17 December, 2008"},"content":{"rendered":"
Bombay High Court<\/div>\n
The Commissioner Of Central … vs M\/S.Godrej & Boyce Mfg. Co. Ltd. on 17 December, 2008<\/div>\n
Bench: F.I. Rebello, J.P. Devadhar<\/div>\n
                               -1-\n\n\n             IN THE HIGH COURT OF JUDICATURE AT BOMBAY\n                ORDINARY ORIGINAL CIVIL JURISDICTION\n\n                CENTRAL EXCISE APPEAL NO.175 OF 2006\n\n\n\n\n                                                                         \n    The Commissioner of Central Excise,      )\n    Mumbai-II, having office at 9th Floor,   )\n    Piramal Chambers, Jijibhoy Lane,         )\n\n\n\n\n                                                 \n    Parel, Lalbaug, Mumbai-400 012.          )..APPELLANT\n\n           Versus\n\n    1.M\/s.Godrej & Boyce Mfg. Co. Ltd.       )\n\n\n\n\n                                                \n    having office at Pirojsha Nagar,         )\n    L.B.S. Marg, Vikhroli (W),               )\n    Mumbai-400 079                           )..RESPONDENT\n\n    Mr.  R.B.   Raghuvanshi, Additional Solicitor General with\n\n\n\n\n                                           \n    Mr. P.S. Jetly, Mr.A.M.Sethna, Ms.Anamica Malhotra and Mr.\n    H.P. Chaturvedi, for the Appellant.\n                          \n    Mr. Arshad Hidayatullah, Senior Counsel with Mr.\n    M.Baxi and Mr.Ricabchand K, for the Respondent\n\n                                     WITH\n                         \n                CENTRAL EXCISE APPEAL NO.262 OF 2006\n\n\n    The Commissioner of Central Excise,      )\n    4th Floor, Kendriya Utpad Shulk          )\n           \n\n\n    Bhawan, Plotl No.1, Sector -17,          )\n    Khandeshwar, New Panvel, Dist.Raigad     )\n        \n\n\n\n    Maharashtara-410 206                     )..APPELLANT\n\n           Versus\n\n    1.M\/s.Castrol India Ltd.,              )\n\n\n\n\n\n    Plot No.A-8\/A-14, M.I.D.C., Patalganga )\n    District Raigad,                       )..RESPONDENT\n\n    Mr. R.B. Raghuvanshi, Additional Solicitor\n    General with Mr. P.S. Jetly, Ms. Heena P. Shah\n    and Mr. H.P. Chaturvedi, for the Appellant.\n\n\n\n\n\n    Mr. Anupam Dighe with Ms. Raji Radhakrishnan\n    Nair & Mr. Pratik Pawar i\/b. India Law Alliance,\n    for respondent.\n\n                                     WITH\n\n                CENTRAL EXCISE APPEAL NO.269 OF 2006\n\n    The Commissioner of Central Excise,      )\n    Belapur, 1st Floor, C.G.O. Complex,      )\n    C.B.D. Belapur, Navi Mumbai              )..APPELLANT\n\n           Versus\n\n    1.M\/s.Philips India Ltd.                 )\n\n                                                 ::: Downloaded on - 09\/06\/2013 14:09:18 :::\n                                 -2-\n         3, M.I.D.C. Industrial Area,                   )\n         Thane Belapur Road, Thane-400 601              ).RESPONDENT\n\n    Mr. R.B. Raghuvanshi, Additional Solicitor\n    General with Mr. P.S. Jetly, Ms. Heena P. Shah\n    and Mr. H.P. Chaturvedi, for the Appellant.\n\n    Mr. Prakash Shah with Mr. Jitu Motwani i\/b. P.D.S.\n\n\n\n\n                                                                                      \n    Legal, for the Respondent\n\n                          CORAM: F.I. REBELLO & J.P. DEVADHAR, JJ.\n<\/pre>\n
                          DATE : 17TH DECEMBER, 2008<\/p>\n
    JUDGMENT: (PER F.I. REBELLO, J.).\n<\/p>\n
    .        Before       we     frame     the     question        of       law       for<\/p>\n
    consideration,        a    few relevant facts in each of              the      cases<\/p>\n
    need to be set out.\n<\/p>\n
    2.       Central      Excise    Appeal     No.175    of 2006        is     by     the<\/p>\n
    Revenue against the order dated 26th October, 2005 passed by<\/p>\n
    the    CESTAT dismissing the Appeal preferred by the                     Revenue.\n<\/p>\n
    In    this   case seven show cause notices were issued                     by     the<\/p>\n
    Department      claiming differential duty, penalty and interest<\/p>\n
    under Section 11AB between 2nd November, 1090 to 11th April,<\/p>\n
    2000.     By order of 9th March, 2001 the Deputy                  Commissioner<\/p>\n
    confirmed the duty and penalty as claimed by the Department.\n<\/p>\n
    No    finding    was      given on interest as claimed in               the     show<\/p>\n
    cause    notice.       The Company preferred an Appeal before                     the<\/p>\n
    Commissioner      (Appeals)      against      the demand       for      duty      and<\/p>\n
    penalty.     That Appeal came to be allowed on 16th July, 2001.\n<\/p>\n
    The     issue    of    interest      was     not   in   issue       before        the<\/p>\n
    Commissioner      (Appeals).      An order then came to be passed on<\/p>\n
    7th    August, 2001 in exercise of the powers conferred                        under<\/p>\n
                                                              ::: Downloaded on – 09\/06\/2013 14:09:18 :::<\/span>
\n                              -3-<\/span>
\n    Section 35E(2) directing that an appeal be preferred against<\/p>\n
    the    non-granting of interest as demanded in the show                             cause<\/p>\n
    notice      by    the Deputy Commissioner by his order                     dated       9th<\/p>\n
    March,      2001.       Accordingly, an appeal was preferred by                        the<\/p>\n
    Revenue      before      the Commissioner (Appeals) on 23rd                     August,<\/p>\n
    2001.       By    order      of 31st December, 2001            the     Commissioner<\/p>\n
    passed      an    order      allowing     the      Departmental          Appeal        for<\/p>\n
    interest.        The Company preferred an Appeal before the CESTAT<\/p>\n
    which    appeal        is    allowed based on the doctrine                 of     merger<\/p>\n
    considering        the      orders of 9th March, 2001 and                16th       July,<\/p>\n
    2001    and      placing      reliance on the judgment of                the      larger<\/p>\n
    Bench    of      the    Tribunal in the case of CCE, New                   Delhi       vs.<\/p>\n
    L.M.L.\n<\/p>\n
    (Tri-LB).\n<\/p>\n
                  Ltd.       (Scooter\n                                       ig  Division)       2002       (143)       ELT      431\n                                     \n    3.       Central        Excise      Appeal    No.262      of    2006       has       been\n\n    preferred        by the Revenue against the order dated 2nd March,\n              \n\n\n    2006    whereby        the Tribunal applied the doctrine                   of     merger\n           \n\n\n\n    placing      reliance        on the judgment in L.M.L.              Ltd.        (supra)\n\n    and    accordingly          dismissed    the    appeal      preferred           by     the\n\n    Revenue      against        the   portion     of    the    impugned          order       in\n\n\n\n\n\n    original      dated 31st December, 2003 whereby the Commissioner\n\n<\/pre>\n
    dropped the penalties under Section 11AC and confirmation of<\/p>\n
    interest      under Section 11AB.            Show cause notice was                issued<\/p>\n
    to    the    Company.         The    Commissioner by        order        dated       31st<\/p>\n
    December,        2003 set aside the duty demanded in the SCN                         with<\/p>\n
    direction that duty for the year 2001 shall be considered by<\/p>\n
    the    Assistant        Commissioner, but dropped the penalty                       under<\/p>\n
    Section      11AC      and demand for interest under                Section         11AB.\n<\/p>\n
                                                                   ::: Downloaded on – 09\/06\/2013 14:09:18 :::<\/span>
\n                                    -4-<\/span><\/p>\n
    Penalty      was    imposed under Rule 173 of the             Central         Excise<\/p>\n
    Rules.       Penalty      was    also imposed on an employee.                 In     an<\/p>\n
    Appeal      preferred by the Company, the appeal was allowed                         by<\/p>\n
    order    dated 11th June, 2004 as the Tribunal found, that the<\/p>\n
    Commissioner        had dropped the demand for duty on the                    ground<\/p>\n
    that    the    same    was      raised     before    finalisation           of     the<\/p>\n
    provisional         assessment       and     as     such    there         was        no<\/p>\n
    justification        for imposing penalty upon the appellants.                       By<\/p>\n
    order    dated      2nd    November, 2004, an order           was      passed        by<\/p>\n
    C.B.E.C.       directing the Commissioner to apply to CESTAT for<\/p>\n
    correct determination of the points as set out in the order.\n<\/p>\n
    4.<\/p>\n
\n\n    the\n             Central\n\n           Revenue      against\n                                    \n<\/pre>\n
                          Excise Appeal No.269 of 2006 is preferred by<\/p>\n
                                     the order of the      CESTAT        dated       28th<\/p>\n
    October, 2005, where CESTAT held that the doctrine of merger<\/p>\n
    will apply and in the light of that allowed the appeal filed<\/p>\n
    by    the    company      and set aside the order passed               in     Review<\/p>\n
    dated    20th      March, 2003.      The learned Tribunal referred                   to<\/p>\n
    the    decision of the larger Bench in L.M.L.                 Ltd.        (supra).\n<\/p>\n
    Five    show      cause    notices were served on the            company.            By<\/p>\n
    order dated 29th September, 2000 the Additional Commissioner<\/p>\n
    held    that the show cause notice dated 30th April, 1996                          was<\/p>\n
    time     barred.          The     additional      Commissioner,           however,<\/p>\n
    confirmed      the    demands in respect of the other                show       cause<\/p>\n
    notices demanding duty, but did not impose any penalty.                            The<\/p>\n
    company      preferred      an appeal.      The    Commissioner          (Appeals)<\/p>\n
    allowed      the appeal and remanded the matter to the                    original<\/p>\n
    authority      for    verifying      the facts and to         decide        and      to<\/p>\n
    conduct      an    enquiry whether the disputed            product        “capping<\/p>\n
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\n                                  -5-<\/span>
\n    cement”    is    actually marketable and as such             excludable           by<\/p>\n
    order    dated 20th February, 2001.         On 24th August, 2001                the<\/p>\n
    Commissioner      of    Central Excise under powers           conferred           by<\/p>\n
    Section    35E(2) directed that an appeal be filed against the<\/p>\n
    order    in    original dated 29th September, 2000              whereby         the<\/p>\n
    show cause notice dated 30th April, 1996 had been held to be<\/p>\n
    time    barred.    Accordingly an appeal was preferred which was<\/p>\n
    allowed    by    order dated 1st April, 2002.        Against that               the<\/p>\n
    Company went in Appeal before CESTAT.\n<\/p>\n
    5.       The    question      of   law as raised   in      Central         Excise<\/p>\n
    Appeal No.175 of 2006 is as under:-\n<\/p>\n
             “Whether<\/p>\n
                           the CESTAT was right in law in applying the<\/p>\n
             doctrine      of    merger, when the issue involved in                 the<\/p>\n
             appeal    filed      by the assessee was whether             duty      and<\/p>\n
             penalty    were      rightly imposed whereas in the               appeal<\/p>\n
             filed    by the Revenue the issue involved was                  whether<\/p>\n
             interest      could    be levied under Section 11AB of                 the<\/p>\n
             Central Excise Act, 1944.”\n<\/p><\/blockquote>\n
\n<\/blockquote>\n
    6.       In    Central Excise Appeal No.262 of 2006 the question<\/p>\n
    of law as framed is as under:-\n<\/p>\n
             “Whether      the Customs, Excise & Service Tax Appellate<\/p>\n
             Tribunal      is right in law in holding that the                 appeal<\/p>\n
             filed    by    the revenue, pursuant to the Review                  Order<\/p>\n
             passed    by the Central Board of Excise & Customs,                      on<\/p>\n
             the    issues      of duty, levy of penalty         under       Section<\/p>\n
                                                            ::: Downloaded on – 09\/06\/2013 14:09:18 :::<\/span>
\n                                     -6-<\/span>
\n              11AC     and    interest under      Section     11AB       is      not<\/p>\n
              maintainable on the principle of merger as it had set<\/p>\n
              aside     the     Order-in-Original        passed          by      the<\/p>\n
              Commissioner,      on   appeal   filed by the      assessee          in<\/p>\n
              respect    of the issue of levy of penalty under                Rules<\/p>\n
              173Q and 209A.”\n<\/p><\/blockquote>\n
\n<\/blockquote>\n
    7.        In    Central Excise Appeal No.269 of 2006 the question<\/p>\n
    of law involved is as under:-\n<\/p>\n
              “Whether    the    CESTAT   was right in    relying         on     the<\/p>\n
              judgment    in LML Limited by invoking the doctrine                  of<\/p>\n
              the<\/p>\n
              merger when admittedly the matter was at large before<\/p>\n
                     Additional Commissioner pursuant to the order of<\/p>\n
              Commissioner (Appeals) dated 20th February, 2001.”<\/p>\n<\/blockquote>\n
    8.        The    Scheme   of    the Act may be   firstly       considered.\n<\/p>\n
    Against     any    decision     or order in original      by     a    Central<\/p>\n
    Excise Officer, lower in rank than a Commissioner of Central<\/p>\n
    Excise,     an Appeal lies under Section 35 to the Commissioner<\/p>\n
    of   Appeals.      Under Section 35B any person aggrieved by                 any<\/p>\n
    order     from    authorities     as set out therein can         prefer        an<\/p>\n
    appeal     to    the Appellate Tribunal.      Appellate      Tribunal          as<\/p>\n
    defined under Section 2(aa) to mean, the Customs, excise and<\/p>\n
    Service Tax Appellate Tribunal constituted under Section 127<\/p>\n
    of   the    Customs Act.       Under Section 35A,    the     Commissioner<\/p>\n
    (Appeals)       at the hearing of the Appeal allow the             Appellant<\/p>\n
    to   go    into any ground of appeal even if not raised if                   the<\/p>\n
    Commissioner       is satisfied that the omission was not               wilful<\/p>\n
                                                         ::: Downloaded on – 09\/06\/2013 14:09:18 :::<\/span>
\n                                        -7-<\/span>
\n    or unreasonable.\n<\/p>\n
    .        Under    Section      35B(4) on the respondent receiving                     a<\/p>\n
    notice    that an appeal has been preferred under that Section<\/p>\n
    before    the    Appellate        Tribunal, a party against             whom      the<\/p>\n
    appeal    has been preferred (respondent) may                notwithstanding<\/p>\n
    that he may not have appealed against such order or any part<\/p>\n
    thereof    can file, within forty-five days of the receipt                          of<\/p>\n
    the notice, a memorandum of cross-objections verified in the<\/p>\n
    prescribed      manner    against any part of the            order       appealed<\/p>\n
    against    and    such    memorandum shall be disposed of                  by     the<\/p>\n
    Appellate     Tribunal       as if it were an appeal.           The      relevant<\/p>\n
    provision of Section 35B(4) reads as under:-\n<\/p>\n
             “35B(4).       On    receipt of notice that an             appeal        has<\/p>\n
             been    preferred under this section, the party against<\/p>\n
             whom     the     appeal          has      been    preferred            may,<\/p>\n
             notwithstanding that he may not have appealed against<\/p>\n
             such     order      or    any     part    thereof,     file,        within<\/p>\n
             forty-five      days      of    the receipt of      the      notice,         a<\/p>\n
             memorandum       of      cross-objections        verified         in     the<\/p>\n
             prescribed      manner      against      any part     of     the      order<\/p>\n
             appealed    against        and    such     memorandum        shall         be<\/p>\n
             disposed    of by the Appellate Tribunal as if it                      were<\/p>\n
             an   appeal     presented        within the time       specified           in<\/p>\n
             sub-section (3).”\n<\/p><\/blockquote>\n
\n<\/blockquote>\n
    9.       Section    35E confers suo mottu power on the Board                        to<\/p>\n
    examine an order passed by Commissioner of Central Excise as<\/p>\n
                                                              ::: Downloaded on – 09\/06\/2013 14:09:18 :::<\/span>
\n                                    -8-<\/span>
\n    an   adjudicating       authority and to apply to          the      Appellate<\/p>\n
    Tribunal    or    as    the    case may be the     Customs      and      Excise<\/p>\n
    Revenue    Tribunal for determination of such points as may be<\/p>\n
    ordered    by the Committees of Chief Commissioner of                  Central<\/p>\n
    Excise    under Section 35E(1) or the Commissioner of                  Central<\/p>\n
    Excise    under    Section 35E(2) against order of            adjudicating<\/p>\n
    authority subordinate to him to direct filing of appeals for<\/p>\n
    determination      of    such points as may be specified.              .      The<\/p>\n
    power conferred on the Board and the Commissioner of Central<\/p>\n
    Excise is under Section 35E and which reads as under:-\n<\/p>\n
             “35E.(1)      Powers of Board or Commissioner of              Central<\/p>\n
             Excise<\/p>\n
                       to pass certain orders.– (1) The Board<\/p>\n
             of its own motion, call for and examine the record of
\n                                                                                may,<\/p>\n
             any    proceeding      in which a Commissioner         of     Central<\/p>\n
             Excise    as    an adjudicating authority has passed                 any<\/p>\n
             decision      or order under this Act for the purpose                  of<\/p>\n
             satisfying      itself as to the legality or propriety of<\/p>\n
             any    such decision or order and may, by order, direct<\/p>\n
             such    Commissioner or any other commissioner to apply<\/p>\n
             to the Appellate Tribunal or, as the case may be, the<\/p>\n
             Customs       and    Excise    Revenues    Appellate        Tribunal<\/p>\n
             established under section 3 of the Customs and Excise<\/p>\n
             Revenues      Appellate     Tribunal Act, 1986 (62 of             1986)<\/p>\n
             for    the determination of such points arising out                    of<\/p>\n
             the    decision      or   order as may be specified           by     the<\/p>\n
             Committee of Chief Commissioners of Central Excise in<\/p>\n
             its order:\n<\/p><\/blockquote>\n
\n
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\n                                     -9-<\/span>
\n          Provided       that       where    the    Committee         of       Chief<\/p>\n
          Commissioners        of    Central    Excise     differs         in     its<\/p>\n
          opinion      as    to   the    legality or     propriety         of     the<\/p>\n
          decision      or    order     of the Commissioner         of     Central<\/p>\n
          Excise,      it shall state the point or points on                   which<\/p>\n
          it    differs and make a reference to the Board                    which,<\/p>\n
          after considering the facts of the decision or order,<\/p>\n
          if is of opinion that the decision or order passed by<\/p>\n
          the    Commissioner        of Central Excise is not legal                 or<\/p>\n
          proper, may, by order direct such Commissioner or any<\/p>\n
          other Commissioner to apply to the Appellate Tribunal<\/p>\n
          for    the determination of such points arising out                       of<\/p>\n
          the<\/p>\n
          order.”\n<\/p><\/blockquote>\n
                 decision<\/p>\n
                               or order, as may be specified               in     its<\/p>\n
          “35E(2).The        Commissioner      of Central Excise may,               of<\/p>\n
          his    own    motion, call for and examine the record                     of<\/p>\n
          any    proceeding       in which an      adjudicating         authority<\/p>\n
          subordinate        to him has passed any decision or                 order<\/p>\n
          under    this Act for the purpose of satisfying himself<\/p>\n
          as    to the legality or propriety of any such decision<\/p>\n
          or    order and may, by order, direct such authority or<\/p>\n
          any    Central      Excise     Officer subordinate to            him      to<\/p>\n
          apply     to      the   Commissioner       (Appeals)          for       the<\/p>\n
          determination        of    such    points arising       out      of     the<\/p>\n
          decision      or    order     as   may    be   specified         by     the<\/p>\n
          Commissioner of Central Excise, in his order.”<\/p>\n<\/blockquote>\n
    10.   From    these provisions some distinctions can be noted<\/p>\n
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\n                              -10-<\/span>
\n    in respect of the procedure for appeals before the Appellate<\/p>\n
    Forums.       In    so   far     as     the   Commissioner      (Appeals)           is<\/p>\n
    concerned,      there     is     no provision under       Section        35A      for<\/p>\n
    filing    cross objections from decisions or orders passed                          by<\/p>\n
    an     Officer      of   Central       Excise    lower    in    rank       than       a<\/p>\n
    Commissioner of Central Excise Officer in an Appeal provided<\/p>\n
    under    Section      35.      On     the other hand     if    an     appeal        is<\/p>\n
    preferred      under     Section 35B(1) on receiving notice of                    the<\/p>\n
    appeal,    a    party against whom an appeal has been                   preferred<\/p>\n
    may    notwithstanding         that he may not have appealed               against<\/p>\n
    such    order or any part thereof file within time                    prescribed<\/p>\n
    cross    objections.        These cross objections shall be disposed<\/p>\n
    off by the Appellate Tribunal as if it were an appeal.\n<\/p>\n
    11.      Apart from this jurisdiction under Section 35EA there<\/p>\n
    is    a suo motto power of revision conferred on the Board                          or<\/p>\n
    the Commissioner as the case may be.               Similarly Section 35EE<\/p>\n
    confers    a    power     on     the Central     Government       to     exercise<\/p>\n
    revisional      powers      at    the instance of an       aggrieved           party<\/p>\n
    against    an      order passed under Section 35A.             This power           of<\/p>\n
    revision      can also be exercised on behalf of the Revenue                        if<\/p>\n
    proceedings are taken under Section 35EE(2).\n<\/p>\n
    12.      On    behalf     of the Revenue, learned Counsel,                 submits<\/p>\n
    that    the doctrine of merger is not a doctrine of rigid                         and<\/p>\n
    universal      application        and it cannot be said that             wherever<\/p>\n
    there    are    two orders one by an inferior authority and                       the<\/p>\n
    other    by    superior authority, passed in appeal or                   revision<\/p>\n
    there    is a fusion or merger of the two orders, irrespective<\/p>\n
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\n                                -11-<\/span>
\n    of    the subject matter of the appellate or revisional                       order<\/p>\n
    and    the scope of the Appeal or Revision contemplated by the<\/p>\n
    particular statute.            The application of the doctrine depends<\/p>\n
    on the nature of the Appellate or Revisional jurisdiction in<\/p>\n
    each    case      and    the    scope    of   the   statutory        provisions<\/p>\n
    conferring        the    Appellate or Revisional jurisdiction.                   The<\/p>\n
    Court,      therefore, while considering the doctrine of                    merger<\/p>\n
    will have to consider the issues which were in Appeal before<\/p>\n
    the    Appellate or Revisional Authority and also the                     reliefs<\/p>\n
    sought      in    Appeal      or Revision.    The   learned      Counsel         has<\/p>\n
    relied on several judgments.\n<\/p>\n
    .<\/p>\n
\n\n    Respondents\n               On     the    other\n                                     \n                                      hand   on    behalf   of\n\n<\/pre>\n
                       more specifically in Appeal No.175 of 2006
\n                                                                    the       Private<\/p>\n
                                                                                     the<\/p>\n
    learned      Counsel      submits that the principle of            merger        has<\/p>\n
    been    accepted        by the Supreme Court and this Court and                  the<\/p>\n
    issue      is no longer res integra.          Reliance is also placed on<\/p>\n
    several judgments in support of the said contention.\n<\/p>\n
    .          Counsel submits that the orders passed in the appeals<\/p>\n
    preferred        the Appellate Tribunal has correctly applied                    the<\/p>\n
    doctrine of merger and the Appellate Tribunal was within its<\/p>\n
    jurisdiction to dismiss the Appeals.\n<\/p>\n
    13.        The    doctrine      of   merger is neither      a    doctrine          of<\/p>\n
    Constitutional          law    nor a doctrine statutorily          recognised.\n<\/p>\n
    It    is    a common law doctrine founded on the              principles           of<\/p>\n
    propriety        in the hierarchy of justice delivery system.                    The<\/p>\n
    logic underlying the doctrine of merger is that there cannot<\/p>\n
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\n                                   -12-<\/span>
\n    be     more    than one decree or operative orders governing                        the<\/p>\n
    same subject-matter at a given point of time.                     When a decree<\/p>\n
    or order passed by inferior court, tribunal or authority was<\/p>\n
    subjected       to    a    remedy available under the            law      before        a<\/p>\n
    superior       forum,      then    though    the decree      or     order        under<\/p>\n
    challenge        continues         to   be      effective        and       binding,<\/p>\n
    nevertheless         its    finality     is put in jeopardy.              Once      the<\/p>\n
    superior       court has disposed of the lis before it either way<\/p>\n
    –     whether the decree or order under appeal is set aside                           or<\/p>\n
    modified       or simply confirmed, it is the decree or order                         of<\/p>\n
    the     superior      court,      tribunal or authority          which       is     the<\/p>\n
    final,     binding and operative decree or order wherein merges<\/p>\n
    the     decree<\/p>\n
    authority       below.\n<\/p>\n
                      or order passed by the court, tribunal<\/p>\n
                                However, the doctrine is not of universal
\n                                                                                 or     the<\/p>\n
    or     unlimited      application.        The     nature     of     jurisdiction<\/p>\n
    exercised       by    the    superior     forum     and     the     content           or<\/p>\n
    subject-matter         of    challenge laid or which could have                    been<\/p>\n
    laid     shall    have to be kept in view.” See              Kunhayammed            Vs.<\/p>\n
    State     of    Kerala, 2001 (129) E.L.T.           11 (S.C.).            (emphasis<\/p>\n
    supplied).\n<\/p>\n
    14.       Revenue has placed reliance on the judgment in Mauria<\/p>\n
    Udyog     Ltd.       vs.    Commissioner of Central Excise, Delhi                     II<\/a><\/p>\n
    (2003)    9     SCC 139.\n<\/p>\n
                        139      The ratio of that judgment can                  now      be<\/p>\n
    considered.       Pursuant to a show cause notice, the demand was<\/p>\n
    confirmed       and penalty was imposed.          Interest was also               held<\/p>\n
    to    be liable.      In Appeal before the Commissioner                   (Appeals)<\/p>\n
    the    order of adjudication was maintained but the amount                            of<\/p>\n
    penalty       was reduced.        Two Appeals were preferred to CESTAT,<\/p>\n
                                                                ::: Downloaded on – 09\/06\/2013 14:09:18 :::<\/span>
\n                                  -13-<\/span>
\n    one    by    the Company and the other by the Revenue.                       Revenue<\/p>\n
    challenged in its appeal the order of Commissioner (Appeals)<\/p>\n
    to    the    extent of reduction of the penalty amount.                      In     the<\/p>\n
    Appeal      preferred        by    the Company a      conditional         order       of<\/p>\n
    predeposit        was    made by the Tribunal for           entertaining            the<\/p>\n
    Appeal.       The    High Court in the Writ Petition                declined          to<\/p>\n
    interfere        with    the order of predeposit, however,                 extended<\/p>\n
    time    to    deposit.         As the Company failed         to     deposit         the<\/p>\n
    amount      the    appeal      was dismissed.        The   Company        filed       an<\/p>\n
    application        for restoration which was opposed on behalf                        of<\/p>\n
    the    Revenue.         It was submitted that in the             meanwhile          the<\/p>\n
    Appeal       filed      by    the    Revenue     against     the        order         of<\/p>\n
    Commissioner<\/p>\n
    and
\n                        (Appeals)
\n                                       ighad been dismissed by the<\/p>\n
           consequently the impugned order of the Commissioner got
\n                                                                               Tribunal<\/p>\n
    merged      in    the    order of the Tribunal and,            therefore,           the<\/p>\n
    Company’s        appeal cannot be entertained.             The Supreme           Court<\/p>\n
    answered the issue in the following words:-\n<\/p>\n
             “4.       It is evident from the facts noticed above that<\/p>\n
             the      principle        of merger has no applicability.                  The<\/p>\n
             appeal of the Revenue was restricted to the reduction<\/p>\n
             of      the penalty amount by the Commissioner (Appeals).<\/p>\n
             In the appeal of the appellant, the challenge was not<\/p>\n
             only to the penalty but to the entire order including<\/p>\n
             the      order of the Commissioner confirming the                     demand<\/p>\n
             and       holding        that   the    freight     expenses         of     the<\/p>\n
             appellant’s          factory     to   the     buyer’s      factory         are<\/p>\n
             includeable          in the assessable value.           The restricted<\/p>\n
             question        which was the subject matter of the                   appeal<\/p>\n
                                                                ::: Downloaded on – 09\/06\/2013 14:09:18 :::<\/span>
\n                                     -14-<\/span>
\n             of     the    Revenue, under these           circumstances,              cannot<\/p>\n
             result       in the dismissal of the appellant’s appeal by<\/p>\n
             application          of      the principle of merger.               The     said<\/p>\n
             principle         on    the     factual situation herein               has      no<\/p>\n
             applicability           whatsoever.        Mr.   Raval, the            learned<\/p>\n
             Additional          Solicitor-General        very rightly             did     not<\/p>\n
             support       the order on the ground of the applicability<\/p>\n
             of the principle of merger.”\n<\/p><\/blockquote>\n
\n<\/blockquote>\n
    .        From       this judgment, the ratiodecendi, would be                        that<\/p>\n
    even if an Appeal preferred by one of the parties against an<\/p>\n
    order    of     Commissioner           (Appeals)     before       the      CESTAT        is<\/p>\n
    dismissed, the doctrine of merger would not apply in respect<\/p>\n
    of the appeal preferred by the other party as what has to be<\/p>\n
    considered       is    the      scope of the two appeals,                the    reliefs<\/p>\n
    claimed       and    the     jurisdiction      to     grant       relief        by     the<\/p>\n
    Appellate       Forum.       It may be noted that though the company’s<\/p>\n
    Appeal        had    been     dismissed      it     was   on      the      ground        of<\/p>\n
    non-deposit, but an application for restoration was pending.\n<\/p>\n
    In    other     words if the two appeals filed are in respect                            of<\/p>\n
    different       parts of the same order merely because an                         appeal<\/p>\n
    preferred       by one of the parties is dismissed on the                         ground<\/p>\n
    of    non-deposit, the doctrine of merger would not apply                              and<\/p>\n
    the    other appeal will have to be decided on its own merits.\n<\/p>\n
    The    Supreme       Court      in Smt.S.Kalawati vs.           Durga        Prasad        &<\/p>\n
    Anr., AIR<\/a> 1975 SC 1272 observed that:-\n<\/p>\n
             “The       principle behind the majority of the                     decisions<\/p>\n
             is    thus     to      the    effect that    where         an     appeal        is<\/p>\n
                                                                   ::: Downloaded on – 09\/06\/2013 14:09:18 :::<\/span>
\n                                       -15-<\/span>
\n             dismissed         on the preliminary ground that it was              not<\/p>\n
             competent         or   for non-prosecution or for        any       other<\/p>\n
             reason       the    appeal is not entertained, the          decision<\/p>\n
             cannot       be    said    to be a decision on appeal         nor      of<\/p>\n
             affirmance.         It is only where the appeal is heard and<\/p>\n
             the judgment delivered thereafter the judgment can be<\/p>\n
             said to be a judgment of affirmance.”<\/p>\n<\/blockquote>\n
    This     was reiterated in Chandi Prasad and Ors.             v.       Jagdish<\/p>\n
    Prasad and Ors.,<\/a> (2004) 8 SCC 724,as
\n                                  724,   under:-\n<\/p>\n
             “When an appeal is dismissed on the ground that delay<\/p>\n
             in<\/p>\n
                   filing the same is not condoned, the doctrine<\/p>\n
             merger shall not apply.”\n<\/p>\n
                                                                                    of<\/p>\n
    The    applicability of the doctrine of merger would depend on<\/p>\n
    the scope of the proceedings already disposed of.                   The ratio<\/p>\n
    of    the judgment in Mauria Udyog Ltd.          (supra) would have to<\/p>\n
    be considered in that context.\n<\/p>\n
    15.      In    that      context we may now consider the judgment                 o<\/p>\n
    the larger Bench of the Tribunal in L.M.L.             Ltd.       (supra) to<\/p>\n
    find out whether it has laid down any new proposition on the<\/p>\n
    doctrine      of    merger.        An Appeal was filed by     the      Revenue<\/p>\n
    challenging        the     order in original dated 27th       April,        2000<\/p>\n
    passed by the Commissioner of Central Excise (Adjudication),<\/p>\n
    New    Delhi.      By that order the Commissioner had dropped                 the<\/p>\n
    demand    raised under the show cause notice.            While       dropping<\/p>\n
    the    demand      the     Commissioner had imposed    penalty         on     the<\/p>\n
                                                          ::: Downloaded on – 09\/06\/2013 14:09:18 :::<\/span>
\n                                      -16-<\/span>
\n    assessee      under      Rule 178(4).     The asseesse filed an            appeal<\/p>\n
    before      the Tribunal challenging the imposition of                 penalty.\n<\/p>\n
    The    Appeal was allowed by the Tribunal by order dated                      29th<\/p>\n
    June,      2000, holding that it is settled law that when                    there<\/p>\n
    is    no    duty demand there could be no penalty.                After       this<\/p>\n
    appeal      was    dismissed      the Central Board of       &    Customs         in<\/p>\n
    exercise      of its power under sub-section (1) of Section                     35E<\/p>\n
    of    the Central Excise Act, 1944 passed an order dated                      24th<\/p>\n
    April,      2001    directing      the Commissioner to       apply       to     the<\/p>\n
    Tribunal      for    determination of the question, whether                  order<\/p>\n
    passed      by the Commissioner not confirming to the demand                      of<\/p>\n
    duty    was erroneous in law.           Pursuant to that, an Appeal was<\/p>\n
    filed<\/p>\n
    Appeal
\n               before    the<\/p>\n
                                Tribunal on 13th July, 2001.\n<\/p>\n
                came up for hearing the assessee filed Memorandum of
\n                                                                          When      the<\/p>\n
    cross      objections      and raised an objection that           the      appeal<\/p>\n
    against the order of the Commissioner dated 27th April, 2000<\/p>\n
    is    not maintainable since the order had already merged with<\/p>\n
    the    order of the Tribunal dated 29th June, 2000 much before<\/p>\n
    the    Board      of Revenue passed the proceedings under                Section<\/p>\n
    35E(1) on 24th April, 2001.             The issue for consideration was<\/p>\n
    whether after the Tribunal had disposed of the Appeal, could<\/p>\n
    the    appeal      filed    on    the direction   of    the      Board       under<\/p>\n
    sub-section        (1)    of    Section   35E before    the      Tribunal         be<\/p>\n
    maintainable.         The      larger   Bench   after    considering            the<\/p>\n
    controversy held that the Appeal filed by the Revenue is not<\/p>\n
    maintainable        as the order impugned had already merged                  with<\/p>\n
    the final order passed by the Tribunal dated 29th June, 2000<\/p>\n
    much    before      any order was passed by the Board             of     Revenue<\/p>\n
    under      Section    35E(1)      and any application      filed       pursuant<\/p>\n
                                                            ::: Downloaded on – 09\/06\/2013 14:09:18 :::<\/span>
\n                                       -17-<\/span>
\n    thereto     before      the    Tribunal.     The S.L.P.        preferred          was<\/p>\n
    dismissed on the ground of delay.\n<\/p>\n
    .         From    the    above      facts,   what follows       is      that      the<\/p>\n
    Tribunal       there held that after the Tribunal had disposed of<\/p>\n
    an Appeal though that Appeal was restricted to the relief of<\/p>\n
    penalty     under      Rule 173Q, the Appeal preferred pursuant                     to<\/p>\n
    the    directions of the Board under Section 35E would not                          be<\/p>\n
    maintainable,       even though it was in respect of a                  challenge<\/p>\n
    to    a   different      part of the order as in the            meantime          the<\/p>\n
    appeal preferred by the Company (Assessee) had been disposed<\/p>\n
    of considering the doctrine of merger.\n<\/p>\n
    16.       The    Tribunal\n                                   \n                                   in    deciding    the   appeal         in     L.M.L.\n                                  \n    (supra)     relied      upon    judgments of the Supreme            Court.          In\n\n    Kunhayammed       Vs.    State of Kerala, 2001 (supra).               The      issue\n\n    before     the Supreme Court in Kunhayammed (supra) related                         to\n                \n\n\n    application       of    doctrine      of merger in relation           to     orders\n             \n\n\n\n    passed     in    petition for special leave under Article 136                       of\n\n    the    Constitution.          The    Tribunal relied on        the      following\n\n    three conclusions:-\n\n\n\n\n\n              \"44.    To sum up our conclusions are:\n\n\n\n\n\n              (i)    Where an appeal or revision is provided                   against\n\n              an    order    passed by a court, Tribunal or               any      other\n\n              authority      before      superior forum and        such      superior\n\n              forum    modifies, reverses or affirms the decision                       in\n\n              issue    before      it,    the decision by      the      subordinate\n\n\n\n\n                                                              ::: Downloaded on - 09\/06\/2013 14:09:18 :::<\/span>\n                             -18-<\/span>\n    forum    merges      in the decision by the superior                    forum\n\n    and     it    is    the     latter    which      subsists,          remains\n\n<\/pre>\n
    operative and is capable of enforcement in the eye of<\/p>\n
    law.\n<\/p>\n
    (ii)……\n<\/p>\n
    (iii)    Doctrine      of    merger    is    not      a    doctrine          of<\/p>\n
    universal      or unlimited application.              It will         depend<\/p>\n
    on    the    nature    of    jurisdiction        exercised          by     the<\/p>\n
    superior      forum and the content or subject-matter                        of<\/p>\n
    challenge      laid    or    capable of being laid               shall       be<\/p>\n
    determinative        of
\n                           ig the applicability of<\/p>\n
    superior jurisdiction should be capable of reversing,
\n                                                               merger,         the<\/p>\n
    modifying      or affirming the order put in issue before<\/p>\n
    it.     Under      Article     136   of    the    Constitution             the<\/p>\n
    Supreme      Court    may    reverse      modify      or     affirm        the<\/p>\n
    judgment,      decree     or    order appealed          against         while<\/p>\n
    exercising      its appellate jurisdiction and not                      while<\/p>\n
    exercising      the discretionary jurisdiction                   disposing<\/p>\n
    of    petition      for   special      leave      to      appeal.          The<\/p>\n
    doctrine      of merger can therefore, be applied to                       the<\/p>\n
    former and not to the latter.\n<\/p>\n
    (iv) ….\n<\/p>\n
    (v) ……\n<\/p>\n
    (vi)    Once    leave     to    appeal has       been      granted         and<\/p>\n
                                                       ::: Downloaded on – 09\/06\/2013 14:09:18 :::<\/span>
\n                                    -19-<\/span>
\n             appellate      jurisdiction          of   Supreme Court           has     been<\/p>\n
             invoked      the order passed in appeal would attract the<\/p>\n
             doctrine      of    merger, the order may be              of      reversal,<\/p>\n
             modification or merely affirmation.”\n<\/p>\n
    .        The    learned Tribunal then noted as has been held                           in<\/p>\n
    the    case of Kunhayammed (supra) that the doctrine of merger<\/p>\n
    will depend upon the nature of the jurisdiction exercised by<\/p>\n
    the    superior forum and the content or the subject matter of<\/p>\n
    challenge      laid or capable of being laid before that                        forum.\n<\/p>\n
    The    superior      jurisdiction should be capable of                   reversing,<\/p>\n
    modifying or affirming the order put in issue before it.                               It<\/p>\n
    was<\/p>\n
    Court in State of Tamil Nadu v.\n<\/p>\n
           the very same principle that was applied by the Supreme<\/p>\n
                                                   Tul.    Jeevanlal Ltd.             etc.,<\/p>\n
    1997    (91) E.L.T.        268 = A.I.R.        1996 S.C.2699.          The Supreme<\/p>\n
    Court    there affirmed the view taken by the High Court                           that<\/p>\n
    where    the appeal had been preferred only in respect of part<\/p>\n
    of    the order by which the Appellant was aggrieved,                         Revenue<\/p>\n
    could    invoke      the revisional jurisdiction to                consider          the<\/p>\n
    legality      of    the other part of the order which was                     not      in<\/p>\n
    issue    before      the Tribunal.        The Supreme Court            considering<\/p>\n
    the    relevant      provisions        held that no exception              could       be<\/p>\n
    taken    to    the view expressed by the High Court.                     The      issue<\/p>\n
    discussed       there      was    in    the     context      to    whether           two<\/p>\n
    authorities        could    exercise jurisdiction in respect of                      the<\/p>\n
    very    same    order.       The Supreme Court held that                 where       the<\/p>\n
    challenge      in    appeal      was    distinct      from    what       was      being<\/p>\n
    considered      by    the    revisional authority, the               exercise          of<\/p>\n
    revisional      power      by    the revisional authority even                  if     an<\/p>\n
                                                                 ::: Downloaded on – 09\/06\/2013 14:09:18 :::<\/span>
\n                                  -20-<\/span>
\n    appeal    had    been filed could not be faulted.               The      learned<\/p>\n
    Tribunal      also referred to the judgment of the Supreme Court<\/p>\n
    in    State    of Madras vs.        Madurai Mills Co.      Ltd., AIR<\/a>          1967<\/p>\n
    S.C.681    where the Supreme Court held that there will be                        no<\/p>\n
    merger when the challenge is only against part of the order.\n<\/p>\n
    17.      From    a consideration of the judgment of the                  Special<\/p>\n
    Bench    what emerges is that if an appeal had been                   preferred<\/p>\n
    before    the Appellate Tribunal against part of the order and<\/p>\n
    that    appeal      had    been dismissed, it was not         open       to     the<\/p>\n
    Commissioner        or    the    Board to    exercise   their       revisional<\/p>\n
    powers    to direct filing of an appeal if Revenue could                      have<\/p>\n
    filed<\/p>\n
             cross objections against that part of the order<\/p>\n
    which no appeal had been preferred.\n<\/p>\n
                                                                                  from<\/p>\n
    .        The    matter      was    taken to the     Supreme     Court.          The<\/p>\n
    Special    Leave      Petitions      was dismissed on      the      ground        of<\/p>\n
    delay.        The     subsequent       observations     considering             the<\/p>\n
    principles      of    ratio decendi, cannot be said to              be     laying<\/p>\n
    down    any    law.       They    appear to    be   observations         on     the<\/p>\n
    findings recorded by the Special Bench.               The settled law is,<\/p>\n
    dismissal of a Special Leave Petition does not result in the<\/p>\n
    Supreme    Court      affirming      the order on     merits.         See     V.M.\n<\/p>\n
    Salgacar      Bros Pvt.      Ltd.    vs.    Commissioner of Income            Tax,<\/p>\n
    2000    (1) SCALE 240, which has been affirmed in                 Kunhayammed<\/p>\n
    (supra).\n<\/p>\n
    18.      The    expression “to merge” means to sink or disappear<\/p>\n
    in    something else, to become absorbed or extinguished;                         to<\/p>\n
                                                            ::: Downloaded on – 09\/06\/2013 14:09:18 :::<\/span>
\n                              -21-<\/span>
\n    be combined or be swallowed up.                 Merger in law is defined as<\/p>\n
    the absorption of a thing of lesser importance by a greater,<\/p>\n
    whereby       the lesser ceases to exist, but the greater is                           not<\/p>\n
    increased;         and absorption or swallowing up so as to involve<\/p>\n
    a     loss    of     identity and individuality.           See        Corpus        Juris<\/p>\n
    Secundum, Vol.          LVII, pp.1067-1068.<\/p>\n
\n\n\n\n\n                                                                   \n    19.         Appellants       apart    from     relying on the          judgment          in\n\n\n\n\n                                                                  \n    Mauria       Udyog Ltd.       (supra) have also relied on the judgment\n\n    in     Commissioner of Income Tax vs.              Shri Arbuda Mills                Ltd.,<\/a>\n\n    (1998)       231     ITR 50 (S.C.).\n                                (S.C.)          The I.T.O.    on      completing           the\n\n\n\n\n                                                    \n    assessment         proceedings       made    while computing the              loss       of\n\n    income\n\n    by    the     assessee\n                                    \n                 and accepted three claims.           An appeal was\n\n                                before the Commissioner             (Appeals).\n                                                                                 preferred\n\n                                                                                           The\n                                   \n<\/pre>\n
    Commissioner of Income Tax exercised his power under Section<\/p>\n
    263    of the Act.         The contention by the assessee before                       the<\/p>\n
    Tribunal       was    that    the     three items in      respect            of     which<\/p>\n
    assessee       had no occasion to prefer an appeal had merged                            in<\/p>\n
    the    order       of the Commissioner (Appeals).               The      matter        was<\/p>\n
    referred       by the Appellate Tribunal under Section 257 of the<\/p>\n
    Income       Tax    Act, 1961 to the Supreme Court on the                     question<\/p>\n
    whether or not the order of the Income-tax Officer regarding<\/p>\n
    the    three       items    had merged in that       of    the         Commissioner<\/p>\n
    (Appeals).          The Supreme Court considered the explanation to<\/p>\n
    Section       263(1)    which was substituted by the                 Finance         Act,<\/p>\n
    1988, with effect from June 1, 1988, which was again amended<\/p>\n
    by    the     Finance Act, 1989, with retrospective                    effect        from<\/p>\n
    June    1, 1988.       The effect of the amendment was that,                        where<\/p>\n
    any    order referred to in the sub-section and passed by                              the<\/p>\n
                                                                   ::: Downloaded on – 09\/06\/2013 14:09:18 :::<\/span>
\n                                     -22-<\/span>
\n    Assessing         Officer had been the subject matter of any appeal<\/p>\n
    (filed on or before or after the 1st day of June, 1988), the<\/p>\n
    powers       of    the Commissioner under sub-section shall                     extend<\/p>\n
    and       shall be deemed always to have extended to such matters<\/p>\n
    as    had     not    been considered and decided          in       such       appeal.\n<\/p>\n
    Considering this the learned Supreme Court observed that :-\n<\/p>\n
                “The     consequence       of    the    amendment          made        with<\/p>\n
                retrospective effect is that the powers under section<\/p>\n
                263    of   the Commissioner shall extend and                   shall      be<\/p>\n
                deemed always to have extended to such matters as had<\/p>\n
                not    been    considered       and    decided      in     an     appeal.<\/p>\n<\/blockquote>\n
                the    powers      of<\/p>\n
                Accordingly, in respect of the aforesaid three items,<\/p>\n
                                        the Commissioner under           Section         263<\/p>\n
                shall    extend      and   shall be deemed        always         to    have<\/p>\n
                extended      to    them   because     the same       had       not    been<\/p>\n
                considered       and    decided in the appeal filed               by     the<\/p>\n
                assessee.        Therefore, the order of assessment passed<\/p>\n
                by    the Income-tax Officer on march 31, 1978, had not<\/p>\n
                merged with that of the Commissioner (Appeals), dated<\/p>\n
                December      15, 1979, in respect of the three items                      in<\/p>\n
                dispute     so     as   to exclude the jurisdiction               of     the<\/p>\n
                Commissioner of Income-tax under Section 263.”<\/p>\n<\/blockquote>\n
    20.         We may now refer to some of the judgments relied upon<\/p>\n
    on    behalf       of the Respondents.         A Full Bench of the              Punjab<\/p>\n
    and       Haryana    High      Court   in Punjab     State      Civil        Supplies<\/p>\n
    Corporation         Ltd.     vs.    Commissioner of Income Tax,
\n                                                               Tax<\/a> 2000 ITR<\/p>\n
    (    P.     & H) (FB) 536 was considering the issue                    of     merger.\n<\/p>\n
                                                                 ::: Downloaded on – 09\/06\/2013 14:09:18 :::<\/span>
\n                                      -23-<\/span><\/p>\n
    The    Full    Bench    firstly    relied   upon    the    Supreme         Court<\/p>\n
    judgment      in    State   of Madras v.    Madurai    Mils       Co.       Ltd.<\/a>\n<\/p>\n
    (1967) 19 STC 144 where the supreme observed as under:-\n<\/p>\n
             “The      doctrine    of merger is not a doctrine of              rigid<\/p>\n
             and universal application, and it cannot be said that<\/p>\n
             wherever      there    are two orders, one by        an     inferior<\/p>\n
             Tribunal and the other by a superior Tribunal, passed<\/p>\n
             in an appeal or revision, there is a fusion or merger<\/p>\n
             of    the two orders irrespective of the subject matter<\/p>\n
             of the appellate or revisional order and the scope of<\/p>\n
             the appeal or revision contemplated by the particular<\/p>\n
             statute.”\n<\/p><\/blockquote>\n
    The    Full    Bench    which    considering   the    issue       under       the<\/p>\n
    provisions      of the Income Tax Act, was pleased to hold                  that<\/p>\n
    once    an    appeal against an order of the Income Tax                Officer<\/p>\n
    under    Section 143(3) of the Act has been heard and                  decided<\/p>\n
    by    the    Appellate Assistant Commissioner, the            Commissioner<\/p>\n
    under    Section      263 has no jurisdiction with regard              to     the<\/p>\n
    issues considered and decided in appeal.             In other words the<\/p>\n
    jurisdiction        would   be restricted only to that part of                the<\/p>\n
    order    of assessment that was not the subject matter of                     the<\/p>\n
    appeal.       From    this judgment what will appear is             that      the<\/p>\n
    doctrine      of merger would apply to the extent of the                 issues<\/p>\n
    considered and decided in Appeal.\n<\/p>\n
    21.      In    Commissioner      of   Income-tax,    Bombay       North       vs.<\/p>\n
    Tajaji      Farasram   Kharawala,<\/a> 23 ITR 412, a learned              Division<\/p>\n
                                                          ::: Downloaded on – 09\/06\/2013 14:09:18 :::<\/span>
\n                                -24-<\/span>
\n    Bench    considering the provisions of the I.T.                   Act held that<\/p>\n
    :-\n<\/p>\n
             “It is well established principle of law that when an<\/p>\n
             appeal        is provided from a decision of a Tribunal and<\/p>\n
             the        appeal Court after hearing the appeal passes                      an<\/p>\n
             order,        the    order     of the original Court           ceases        to<\/p>\n
             exist and is merged in the order of the appeal Court,<\/p>\n
             and        although the appeal Court may merely confirm the<\/p>\n
             order        of the trial Court, the order that stands                     and<\/p>\n
             is     operative is not the order of the trial Court but<\/p>\n
             the order of the appeal Court.”\n<\/p><\/blockquote>\n
\n<\/blockquote>\n
    22.      In<\/p>\n
                    Commissioner of Income-tax vs.              P.    Muncherji and<\/p>\n
    Company,<\/a>       (1987)      167    ITR 671 the     learned      Division          Bench<\/p>\n
    referred       to    the     following      observations     in      C.I.T.,        vs.<\/p>\n
    Amritlal Bhogilal & Co., (1958) 34 ITR 130:-\n<\/p>\n
             “As a result of the confirmation or affirmance of the<\/p>\n
             decision       of the tribunal by the appellate authority,<\/p>\n
             the    original         decision    merges   in       the        appellate<\/p>\n
             decision and it is the appellate decision alone which<\/p>\n
             subsists          and     is    operative     and          capable           of<\/p>\n
             enforcement;…..”\n<\/p><\/blockquote>\n
\n<\/blockquote>\n
    The   learned        Division Bench then held that the judgment                       in<\/p>\n
    C.I.T.     v.       Tajaji Farasram Kharawala (supra) continues                       to<\/p>\n
    hold the field.\n<\/p>\n
                                                                ::: Downloaded on – 09\/06\/2013 14:09:18 :::<\/span>
\n                                           -25-<\/span><\/p>\n
    23.          In     J.K.         Synthetics       Ltd.        vs.         Additional<\/p>\n
    Commissioner of Income-tax U.P.                 & Anr.,<\/a> 105 ITR (Allahabad)<\/p>\n
    344 the learned Bench there observed that on a finding given<\/p>\n
    by     the    I.T.O.       if such finding could have            been       canvassed<\/p>\n
    before       the        Appellate Assistant Commissioner in the                  appeal<\/p>\n
    filed     by       the assesses on other points, if              the      department<\/p>\n
    chose     to       do    so.    In view of the scope and nature                of     the<\/p>\n
    appellate power, the entire subject-matter of the assessment<\/p>\n
    order was within the jurisdiction of the Appellate Assistant<\/p>\n
    Commissioner.             That    being so, the entire assessment                  order<\/p>\n
    merged       in     the appellate order, irrespective of the                     points<\/p>\n
    urged        by     the    parties    or      decided    by      the        appellate<\/p>\n
    authorities.\n<\/p>\n
    24.      Sheodan          Sigh vs.    Daryao Kuwait, AIR<\/a> 1966 S.C.                  1332<\/p>\n
    is really not an authority on the doctrine of merger, but on<\/p>\n
    the principles of res judicata.\n<\/p>\n
    25.       We       may next refer to the Judgment of the Full                      Bench<\/p>\n
    of     the    Karnataka High Court in Commissioner of Income                          Tax<\/p>\n
    vs.      Hindustan             Aeronautics    Ltd.,<\/a>     (1986)      157      IR       315<\/p>\n
    (Karnataka).\n<\/p>\n
    (Karnataka)              The    assessee there filed an          appeal        against<\/p>\n
    part    of        the    order of A.A.C.      by which    the       assesses          was<\/p>\n
    aggrieved,          however, withdrew the appeal and filed                   Revision<\/p>\n
    before the Commissioner.              The Department preferred an appeal<\/p>\n
    to    Tribunal          against that part of the order of               A.A.C.          by<\/p>\n
    which relief was given to the assessee.                  That appeal came to<\/p>\n
    be    disposed of.          The question was whether the              Commissioner<\/p>\n
    could    exercise          revisional jurisdiction.           The learned           Full<\/p>\n
                                                                  ::: Downloaded on – 09\/06\/2013 14:09:18 :::<\/span>
\n                                     -26-<\/span>
\n    Bench       held    that the Appellate Assistant                   Commissioner            can<\/p>\n
    look     into and adjudicate upon the findings recorded by                                 the<\/p>\n
    Income Tax Officer which may expressly be the subject matter<\/p>\n
    of    an     appeal       but       also    upon    a    matter     which        has     been<\/p>\n
    considered         and determined by the Income-tax Officer in                             the<\/p>\n
    course       of    the     assessment.            In other    words,          the     entire<\/p>\n
    subject       matter       of       the    assessment      would      be      within       the<\/p>\n
    jurisdiction of the Appellate Assistant Commissioner and the<\/p>\n
    revisional         authority          would      not     entertain       the      revision<\/p>\n
    considering the express bar under Section 264(4) of the I.T.\n<\/p>\n
    Act.\n<\/p>\n
    26.<\/p>\n
\n\n    Maharashtra\n                In    Khandelwal\n\n                        1991       80\n                                         \n                                          Ferro\n\n                                         STC    42\n                                                     Alloys\n\n                                                       a\n                                                               Ltd.\n\n                                                             learned\n                                                                          vs.\n\n                                                                          Division\n                                                                                     State\n\n                                                                                            Bench\n                                                                                                 of\n                                        \n    considered         the doctrine of merger and held that it                          depends\n\n    on    the    subject matter of decision and scope                        of      appellate\n\n    jurisdiction.\n              \n           \n\n\n\n    27.        Reference       was made to the judgment of this Court                            in\n\n    Commissioner         of Income Tax vs.             Smt.    A.S.         Narendrakumari\n\n    Basaheba,<\/a>         (1989)       176 ITR 515.        The learned Division                 Bench\n\n\n\n\n\n    there      had     held    that the order of the Income                    Tax      Officer\n\n    merges       with        the    order       of     the     Appellate             Assistant\n\n    Commissioner         on all points irrespective of which an                           Appeal\n\n\n\n\n\n    could      have been filed before him or in respect of which the\n\n    Appellate         Assistant         Commissioner could have              modified          the\n\n    order.       The     Commissioner of Income Tax cannot,                        therefore,\n\n<\/pre>\n
    cannot revise the order of the Income Tax Officer.\n<\/p>\n
                                                                       ::: Downloaded on – 09\/06\/2013 14:09:18 :::<\/span>
\n                                         -27-<\/span><\/p>\n
    28.       In     Commissioner       of Income Tax        vs.        International<\/p>\n
    Computers        Indian Manufacture Ltd.<\/a>          187 ITR 580 the           learned<\/p>\n
    Division        Bench    held that the Tribunal was right in law                     in<\/p>\n
    holding     that the passing of an order by the Commissioner of<\/p>\n
    Income     Tax (Appeals) resulted in the merger of the order of<\/p>\n
    Commissioner        (Appeals) thereby ousting the jurisdiction                       of<\/p>\n
    the    Commissioner        of Income Tax from exercising his                   powers<\/p>\n
    under     Section 263 of the Income Tax Act, 1961 in respect of<\/p>\n
    the order appealed against.<\/p>\n
\n\n\n\n    29.       We     have    also     considered the judgment in              State      of\n\n\n\n\n                                                  \n    Kerala & Anr.       Vs.     Kondotty Paramban Moosa & Ors.                2008 AIR\n\n    SCW    5677.\n\n    considered\n                      The     case\n\n                      including\n                                     \n                                      law on the doctrine\n\n                                       the    ratio   of   the\n                                                                   of    merger\n\n                                                                     judgment\n                                                                                       was\n\n                                                                                         in\n                                    \n    Kunhayammed       when     the    principles      laid    down       in     Shankar\n\n    Ramchandra Abhtyankar vs.            Krishnaji Dattatraya Bapat<\/a> (1969)\n\n    2   SCC    74    were     approved.      The ratio of     the       judgment         in\n              \n\n\n    Kunhayammed       (supra) is in applying the doctrine of                    merger,\n           \n\n\n\n    what      the    Court     must    consider    is   the     nature        of       the\n\n    jurisdiction       exercised       by    the   superior        forum      and      the\n\n    contract       or subject matter of challenge laid or which could\n\n\n\n\n\n    have    been laid.        In that case the earlier revision petition\n\n    was    not rejected on merits but only on the ground of                         delay\n\n    and    as such could not be said to be an order of                     affirmance\n\n\n\n\n\n<\/pre>\n
    and as such the doctrine of merger would not apply.\n<\/p>\n
    30.       Section       35B(4) enables the respondents to file cross<\/p>\n
    objections       against     that    part of the order from              which       no<\/p>\n
    appeal     has been preferred.           Can the Tribunal in the absence<\/p>\n
                                                               ::: Downloaded on – 09\/06\/2013 14:09:18 :::<\/span>
\n                                -28-<\/span>
\n    of    cross objections have jurisdiction to confirm, modify or<\/p>\n
    reverse that part of the order from which no appeal has been<\/p>\n
    preferred?         The language of the Section makes it clear that<\/p>\n
    on filing of cross objections against any part of the order,<\/p>\n
    the    cross      objections be treated as an Appeal against                  that<\/p>\n
    part    of    the order only.       The Relspondent ‘may’ file               cross<\/p>\n
    objection      and not “shall”.       It is, therefore, the choice of<\/p>\n
    the    Appellants.        Under Section 35C, the Appellate             Tribunal<\/p>\n
    has    powers to confirm, modify or annul the decree or                      order<\/p>\n
    appealed      against.       In   other   words   the    jurisdiction             is<\/p>\n
    limited to examine the legality of that part of the order in<\/p>\n
    respect      of    which the Appeal or cross objection              have      been<\/p>\n
    preferred.\n<\/p>\n
    of<\/p>\n
                       Thus it cannot exercise jurisdiction in respect<\/p>\n
          that part of the order in respect of which no appeal has<\/p>\n
    been preferred.          Under these circumstances will the doctrine<\/p>\n
    of    merger      apply    in respect of an    appeal      preferred          only<\/p>\n
    against part of the order.\n<\/p>\n
    31.      Section      35E is an independent power conferred on the<\/p>\n
    Board    or Commissioner, as the case may be, to direct filing<\/p>\n
    of    an Appeal in respect of the entire order or part of                       the<\/p>\n
    order    where the appeal has not been preferred.                 Considering<\/p>\n
    the    nature of jurisdiction exercised by the Tribunal                      under<\/p>\n
    Section      35B    if    the appeal filed before       the     Tribunal          is<\/p>\n
    dismissed,        is the Board precluded from directing filing                    an<\/p>\n
    appeal or if an appeal is filed the same be dismissed on the<\/p>\n
    ground    of merger.        For the principle of merger to apply the<\/p>\n
    order    must      result    in the challenge to     the      entire         order<\/p>\n
    becoming      final.       As observed by Supreme Court in State                  of<\/p>\n
                                                            ::: Downloaded on – 09\/06\/2013 14:09:18 :::<\/span>
\n                                    -29-<\/span>
\n    Madras      vs.    Madurai Mills Co.         Ltd., AIR<\/a> 1967 S.C.681 there<\/p>\n
    can be no fusion or merger of two orders irrespective of the<\/p>\n
    subject      matter of the appellate or revisional order and the<\/p>\n
    scope    of    the      appeal     or     revision     contemplated            by     the<\/p>\n
    particular        statute.      Thus merely because under Section                     35B<\/p>\n
    (4)    the respondent on notice may file cross objections,                              if<\/p>\n
    cross    objection is not filed cannot result in holding                            that<\/p>\n
    the    doctrine of merger would apply and the appeal preferred<\/p>\n
    against      the    directions of the CBDT has to be dismissed                          on<\/p>\n
    the    principle of merger.             The law as settled and              explained<\/p>\n
    by    the    Supreme Court in the various judgments referred                            to<\/p>\n
    would    not support such proposition.                The Appellate Tribunal<\/p>\n
    in    the<\/p>\n
    challenged,
\n                 absence<\/p>\n
                       cannot
\n                              of<\/p>\n
                                    that<\/p>\n
                                   examine
\n                                             part<\/p>\n
                                               the
\n                                                     of   the<\/p>\n
                                                       legality
\n                                                                order<\/p>\n
                                                                       or
\n                                                                              not      being<\/p>\n
                                                                                otherwise<\/p>\n
    considering        the    statutory power conferred on the                   Tribunal<\/p>\n
    under Section 35C.\n<\/p>\n
    32.      Even      if    Revenue     is respondent in          the      proceedings<\/p>\n
    before the Tribunal, that would not exclude the jurisdiction<\/p>\n
    under    Section        35E merely because Revenue could have                      filed<\/p>\n
    cross    objections.           Section 35C(4) enables a Respondent                      to<\/p>\n
    prefer      cross      objection.       The Section does not            prohibit          a<\/p>\n
    Respondent        if    it   has    not     filed     cross      objection          from<\/p>\n
    preferring        an    appeal.     The scheme of the Section does                    not<\/p>\n
    expressly      or impliedly bar filing of an Appeal.                      The      power<\/p>\n
    under    Section        35B is to the person aggrieved to prefer                        an<\/p>\n
    appeal.       The      power under Section 35E is conferred                    on     the<\/p>\n
    Board    on its own motion to call for and examine the                           record<\/p>\n
    and proceedings.          If if forms an opinion that the appeal has<\/p>\n
                                                                  ::: Downloaded on – 09\/06\/2013 14:09:18 :::<\/span>
\n                              -30-<\/span>
\n    to be preferred then it can direct filing of such an appeal.\n<\/p>\n
    Clearly    considering        the provisions of the           Central         Excise<\/p>\n
    Act,    1944 in terms of what we have discussed, the                      doctrine<\/p>\n
    of merger would not apply in the absence of the entire order<\/p>\n
    being    the subject matter of the Appeal and the Appeal being<\/p>\n
    heard and finally decided on merits.\n<\/p>\n
    33.      It    may    be   further clarified that in so far                   as     an<\/p>\n
    appeal    filed under Section 35, the procedure is governed by<\/p>\n
    Section    35A.       There    is   no    provision      for     filing         cross<\/p>\n
    objections      against the order in original.              The doctrine             of<\/p>\n
    merger    in    such    case    would not apply.          The      final        order<\/p>\n
    considering<\/p>\n
    result    in
\n                     the<\/p>\n
                            ‘principle       or doctrine<\/p>\n
                    a challenge to the entire order becoming
\n                                                              of     merger’         must<\/p>\n
                                                                                  final.\n<\/p>\n
    34.      The applicability of the doctrine thus depends on the<\/p>\n
    nature    of    the Appellate or revisional             jurisdiction.              The<\/p>\n
    scope    of the statutory provisions conferring the                      appellate<\/p>\n
    or    revisional      jurisdiction must be first            considered.              As<\/p>\n
    rightly    argued by the Appellants the doctrine of merger                           is<\/p>\n
    not    a doctrine of rigid and universal application.                         Merely<\/p>\n
    because    there are two orders, one by the inferior authority<\/p>\n
    and the other by a superior authority passed in an appeal or<\/p>\n
    revision,      it    cannot be said that there is a merger of                      the<\/p>\n
    two    orders    irrespective       of    the    subject      matter        of     the<\/p>\n
    appellate      or revisional order and this scope of the                      appeal<\/p>\n
    or revision contemplated by the particular statute.                         A Court<\/p>\n
    or    Tribunal      while applying the doctrine must consider                      the<\/p>\n
    nature    of    the    order    and      the    scope    of     the      statutory<\/p>\n
                                                               ::: Downloaded on – 09\/06\/2013 14:09:18 :::<\/span>
\n                                        -31-<\/span>
\n    provisions       conferring         the      appellate      or       revisional<\/p>\n
    jurisdiction.\n<\/p>\n
    35.      The    following principles will have to be                 considered<\/p>\n
    while    applying the doctrine of merger in the context of the<\/p>\n
    provisions of “The Central Excise Act, 1944′.\n<\/p>\n
    1.       In    the proceedings from which the matter arises, the<\/p>\n
    Court    or    Tribunal hearing the appeal or            revision,          should<\/p>\n
    have jurisdiction to decide all issues arising from the said<\/p>\n
    order of the inferior Court or Tribunal from whose order the<\/p>\n
    proceedings arise.\n<\/p>\n
    2.       The    Appeal\n                                  \n                                should    not have been dismissed             on     the\n                                 \n    ground    of limitation or failure to deposit as ordered.                        The\n\n    Appeal    should have been heard and decided on merits on                        the\n\n<\/pre>\n
    issues raised and or could have been raised including by the<\/p>\n
    Respondent.         In such an event the doctrine of merger                   would<\/p>\n
    apply.\n<\/p>\n
    3.       If    the    proceedings      are    pending    before        the     same<\/p>\n
    Appellate      Tribunal the power under Section 35E can still be<\/p>\n
    exercised      by    the    Competent Authority.         The     doctrine          of<\/p>\n
    merger    will      not    apply    even   if one   of    the      Appeals         is<\/p>\n
    dismissed, provided the other appeal is pending.\n<\/p>\n
    4.       Even    if    the Appeal preferred under Section 35B                    has<\/p>\n
    been disposed off, an appeal can still be preferred pursuant<\/p>\n
    to    direction      issued    under Section 35E, if in            the      appeal<\/p>\n
                                                             ::: Downloaded on – 09\/06\/2013 14:09:18 :::<\/span>
\n                              -32-<\/span>
\n    disposed off, the entire order was not the subject matter of<\/p>\n
    the Appeal.\n<\/p>\n
    36.      In the light of the above the question raised in each<\/p>\n
    of the Appeals can be disposed off as under:-\n<\/p>\n
    (i)      In      Central Excise Appeal No.175 of 2006 the                 Revenue<\/p>\n
    had    no    occasion        to   raise the   issue   against        the      order<\/p>\n
    impugned      before        the Commissioner (Appeals) in          respect         of<\/p>\n
    that    part of the order which they were aggrieved.                    There is<\/p>\n
    also    no provision for filing cross objections.                  Disposal of<\/p>\n
    the    Appeal, therefore, by the Commissioner (Appeals)                       would<\/p>\n
    not<\/p>\n
    be    filed      on<\/p>\n
           prelude the Commissioner from directing that an<\/p>\n
                           points not in issue in the        Appeal        filed
\n                                                                                Appeal<\/p>\n
                                                                                       by<\/p>\n
    company      and      in respect of that part of the order by                 which<\/p>\n
    revenue      was      aggrieved.      Accordingly, the question           of     law<\/p>\n
    raised      in    the    Appeal      will have to   be   answered         in     the<\/p>\n
    negative      and      in    favour of the Appellants.         The      impugned<\/p>\n
    order    is      set    aside     and the matter    is   remanded         to     the<\/p>\n
    Appellate        Tribunal for redetermination of the questions                     on<\/p>\n
    merits according to law.\n<\/p>\n
    (ii)     In      so far as Central Excise Appeal No.262 of 2006 is<\/p>\n
    concerned, the appeal had been preferred by the Company only<\/p>\n
    in    respect      of    that part of the order by which             they      were<\/p>\n
    aggrieved.         The      entire    order there was    not     the      subject<\/p>\n
    matter      of    Appeal.      In these circumstances the doctrine                 of<\/p>\n
    merger      would not apply.          In the light of that the          question<\/p>\n
    of    law    will      have to be answered in the        negative         and      in<\/p>\n
                                                             ::: Downloaded on – 09\/06\/2013 14:09:18 :::<\/span>
\n                                      -33-<\/span>
\n    favour    of the Revenue.        Order is accordingly set aside              and<\/p>\n
    the    matter    is    remanded to the Tribunal for        deciding          the<\/p>\n
    appeal on merits.\n<\/p>\n
    (iii)    In    so far as Central Excise Appeal No.269 of 2006 is<\/p>\n
    concerned,      the    Company    preferred   an   Appeal      before        the<\/p>\n
    Commissioner      (Appeals)      which was remanded to the          original<\/p>\n
    Authority.       An    Appeal thereafter was preferred before                the<\/p>\n
    Commissioner      (Appeals)      pursuant to the    directions          issued<\/p>\n
    under    Section      35E(2) against that part of the order               which<\/p>\n
    was    not    an Appeal before Commissioner (Appeals).                In     the<\/p>\n
    light    of that the doctrine of merger would not apply.                     The<\/p>\n
    Revenue.\n<\/p>\n
    question of law is answered in the negative and in favour of<\/p>\n
                   The Appeal is allowed and consequently the                 order<\/p>\n
    of    CESTAT    is set aside and the matter is remanded back                   to<\/p>\n
    CESTAT for deciding the appeal on merits.\n<\/p>\n
    (iv)     All the Appeals stand disposed off accordingly.\n<\/p>\n
             (J.P.DEVADHAR, J)                    (F.I.REBELLO, J)\n\n\n\n\n\n\n                                                         ::: Downloaded on - 09\/06\/2013 14:09:18 :::<\/span>\n <\/pre>\n","protected":false},"excerpt":{"rendered":"
Bombay High Court The Commissioner Of Central … vs M\/S.Godrej & Boyce Mfg. Co. Ltd. on 17 December, 2008 Bench: F.I. Rebello, J.P. Devadhar -1- IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION CENTRAL EXCISE APPEAL NO.175 OF 2006 The Commissioner of Central Excise, ) Mumbai-II, having office at 9th Floor, […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[11,8],"tags":[],"class_list":["post-22401","post","type-post","status-publish","format-standard","hentry","category-bombay-high-court","category-high-court"],"yoast_head":"\nThe Commissioner Of Central ... vs M\/S.Godrej & Boyce Mfg. Co. Ltd. on 17 December, 2008 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/the-commissioner-of-central-vs-ms-godrej-boyce-mfg-co-ltd-on-17-december-2008\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The Commissioner Of Central ... vs M\/S.Godrej & Boyce Mfg. Co. 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