Oil and Natural Gas Corporation Ltd. vs Union of India and Others

D.Y. Chandrachud, J.—On the delay being condoned, the appeal has been taken on Board, by consent and has been called out for admission. The appeal by the assessee arises from an order of the CESTAT dated 31 March 2011. The following questions of law, have been raised in the appeal:

a. Whether on a true construction of Section 11B of the Said Act and the principle of natural justice the Tribunal is correct in its conclusion that no Show Cause Notice is required to be issued proposing to reject the Refund claim filed u/s 11B of the said Act?

b. Whether the CESTAT was correct in holding that a Show Cause Notice, issued to an assessee, proposing to reject the Refund Claim, is only "by and large in a nature of a Counter to the various contentions raised in the Refund Claim"?

c. Whether the Tribunal was correct in deciding the appeal on grounds not contained in either the Show Cause Notice or the Orders of the lower adjudicating authorities and deciding it on entirely new grounds raised before it for the 1st time in appeal by the Departmental representative?

d. Whether the Tribunal can direct the Adjudicating authority on remand to take into consideration, grounds and documents not contemplated by the Show Cause Notice or the Orders of the Adjudicating Authorities?

e. Whether the Tribunal, whilst remanding the matter for de novo adjudicating, can foreclose the matter by virtually pre-deciding all the issues?

We have perused the order of the Tribunal. In view of the order of the Tribunal, proceedings have been remanded back to the Assistant Commissioner for fresh adjudication of the refund claim made by the Appellant, in accordance with law. The Tribunal has, in the course of its judgment, come to the conclusion that several relevant aspects which ought to have been adjudicated by the assesssing officer were not adjudicated. At the same time, it is evident from reading the order of the Tribunal that all the relevant issues have been kept open for adjudication before the Assessing Officer. There is no adjudication by the Tribunal either for or against the Appellant. In this view of the matter, we see no reason to entertain the Appeal, which will not give rise to any substantial question of law.

Before concluding, it is necessary for this Court to observe that while adjudicating upon refund claims, it is necessary in the interest of justice for the assessing officers as well as the first appellate authorities to dispose of all the objections. Otherwise, where the assessing officer or as the case may be the first appellate authority deals with only one or more of the objections without dealing with the claim in its entirety, proceedings remain pending for several years thereafter before the Central Excise and Service Tax Appellate Tribunal. This results in orders of remand in consequence of the failure of the assessing officer or the first appellate authority, as the case may be, to deal with all the aspects of the matter. This prolongs litigation, with several rounds of appeal and remand, which is best avoided both in the interest of the assessee and the revenue. Certainty promotes the rule of law.

Hence, we are of the view and direct that the CBEC should issue necessary guidelines in the form of an administrative circular to ensure that assessing officers and first appellate authorities decide all objections to refund claims.

Insofar as the present appeal is concerned for the reasons already indicated, we see no reason to entertain the appeal in the view which we have taken. Hence, it has not been necessary for this Court to answer the questions of law raised. The appeal is accordingly disposed of. There shall be no order as to costs. A copy of this order shall be marked to the Chairman of the Central Board of Excise and Customs, by the Registrar (Judicial).