Order Date – 23 April 2024

Parties: M/s. GAP International Sourcing (India) Pvt. Ltd. Vs Commissioner (Appeals – I), Service Tax

Facts –

• The Appellant, M/s. GAP International Sourcing (India) Pvt. Ltd., entered into a Service and Support Agreement dated 1.4.2005 with GAP International to promote the business opportunities for GAP International. 
• It filed refund applications seeking refund of accumulated Cenvat credit under Rule 5 of the Cenvat Credit Rules, 20043read with Notification No. 5/2006-CE (NT) dated 14.3.2006. The refund were rejected on several ground without considering the earlier decision of the Tribunal which allowed refunds.

Issue –

• Whether the Commissioner (Appeals) is bound to follow judicial discipline even if it has not been accepted by the department?

Order –

• The Tribunal observed that in this case, the Commissioner (Appeals) has refused to follow judicial discipline on the ground that the order of this Tribunal on the ground that it has not been accepted by the department. The very statement that a judicial decision is ‘not acceptable’ is an objectionable phrase as held by in Kamlakshi Finance and the Commissioner (Appeals) was bound to have followed the order of this Tribunal since it was not stayed, suspended or set aside by a higher court. 
• By displaying gross judicial indiscipline, the Commissioner (Appeals) has caused considerable harassment to the appellant without any benefit to the Revenue. It is to curb this tendency that the Supreme Court had dealt with the issue at length in Kamalakshi Finance. This judgment of the Supreme Court on judicial discipline is over three decades old and is well known.
• In this case, the Commissioner (Appeals) has not only NOT followed the decisions of this Tribunal but displayed scant regard to the principles of judicial discipline laid down by the Supreme Court in Kamlakshi Finance. Hence, the appeal is allowed and the impugned order is set aside.