Department Files Appeal in case already decided in appeal
THE Revenue Department's contribution to Revenue is doubtful, but their contribution to litigation is humungous. See this case.
(i) A Deputy Commissioner passed an Order on 10.1.2006 (obviously confirming the demands made in the SCN)
(ii) The Assessee appealed to the Commissioner (Appeals) who set aside the impugned order on 12.7.2006.
(iii) Till then, the Revenue kept quiet.
(iv) After the Commissioner (Appeals) passed his order, the Department filed an appeal against the DC's order - to the Commissioner (Appeals). It is a cardinal principle that the Commissioner was not supposed to pass an order in favour of the assessee.
(v) By this time there is a new Commissioner (Appeals) who knew his revenue well (though perhaps not the law) allowed the appeal of the Revenue on 27.3.2007, in spite of the assessee submitting that doctrine of merger will apply and so there is nothing for Revenue to appeal against.
(vi) The assessee took the matter in appeal to the Tribunal which allowed the appeal holding that doctrine of merger will apply to the case.
(vii) Department is not going to tolerate such audacity and they took the matter in appeal to the High Court.
(viii) The High Court noted that in this case, the issue raised by the assessee and the Revenue is one and the same. When once the first Appellate Authority has set aside the order of the Adjudicating Authority setting aside the demand, thereby upholding the assessable value, it should be treated as the order passed by the Adjudicating Authority is merged with the Order-in-Appeal. The Department's appeal was dismissed.
The SCN was issued on 4.4.2005 and the High Court judgement in this superfast case was on 22.1.2015. The issue was valuation of excisable goods. Now, they can go to the Supreme Court arguing that High Court had no jurisdiction to decide a valuation issue. Government loses a lot of revenue it collects because of the litigation-loving overanxious officers.