1. The questions that arise for determination in this Revision Application to the Government of India transferred to and heard by the Tribunal pursuant to S. 35P of the Central Excises & Salt Act, 1944 (the Act, for short) are :- (i) whether the cost of jute bags used for packing cement should be included in the assessable value of cement in terms of S. 4(4) (d) of the Act or excluded on the ground that these are of a durable nature and are returnable by the buyer to the Assessee and (ii) if the order of the Hon'ble Supreme Court dismissing S.L.P. (Civil) No. 11044-45 of 1980 is res judicata in these proceedings 2. The hearing of this Appeal was adjourned on a number of occasions to await the judgment of the Supreme Court on the issue of durable and returnable packing. Since, however, in our view, the second of the aforesaid questions is crucial and conclusive, in the facts and circumstances of the case, we proceeded to decide this Appeal, without touching the first question and the various submissions made in regard to it.
(a) the Appellant manufactures cement in the name and style of Birla Cement Works, Chittorgarh in the State of Rajasthan and owns another cement manufacturing unit at Satna in the State of Madhya Pradesh ; (b) in consequence of the amendment to S. 4 of the Act, the Appellant for the Chittorgarh unit filed a price list effective from 1-10-1975 for ordinary grade portland cement in which the cost of packing charged by the Appellant was not included in the assessable value, as was being done prior thereto. The said price list was approved on 21-10-1975 without any amendment whatsoever. (Annexure E to the Revision Application) ; (c) nevertheless, by a letter dated 31-10-1975, the self-same Superintendent, who had approved the price list earlier, informed the Appellant that "the assessable value of grey portland cement may please be treated as Rs. 211.00+40.98 (Rs. 251.98) with effect from 1-10-1975, i.e., after the addition of packing charges as per Sub-clause (i) of Clause (d) of Sub-section (4) of new Section 4 of Central Excise Act applicable from 1-10-1975". The Appellant was accordingly required to submit a revised price list after addition of packing charges for approval. (Annexure F to the Revision Application) ; (d) subsequently, on 19-1-1976, a demand for differential duty, amounting to Rs. 4,70,061.76, in respect of cement cleared during the month of October, 1975, was raised, ostensibly towards central excise payable on the value of the cost of packing in the return submitted for that month (Annexure G to the Revision Application); (e) on protest by the Appellant (Annexure H to the Revision Application), the Assistant Collector confirmed the demand by his Order dated 7th August, 1976 (Annexure I to the Revision Application) ; (f) on appeal to the Appellate Collector, the Adjudication Order was upheld on 24-12-1976 (Annexure J to the Revision Application) ; (g) the Revision Application, now heard as an Appeal, was the sequel ; (h) the first question supra was decided on 18-2-1980 in the Madhya Pradesh High Court in Writ Petition (No. 363 of 1976) filed by the Appellant herein, in respect of the Satna unit (reported in 1980 ELT 593-Birla Jute Manufacturing Co. v. Union of India. It was held by their Lordships that for the period between 1st October, 1975 and 8th January, 1976, relevant in that case, the cost of packing was not includible in the value of cement for purposes of excise duty and the Appellant was entitled to a refund of the duty paid on the cost of packing for the period from 1-11-1975 to 8-1-1976. A Special Leave Petition (Civil) No. 11044-45 of 1980 by the Union of India (the Respondent therein) was dismissed by the Hon'ble Supreme Court on 30-7-1982, in the following words :- 4. It was, inter alia, contended that the Appellant herein was the petitioner in the aforesaid Writ Petition and the decision in the S.L.P. being inter partes, operated as res judicata. In reply, it was submitted for the Respondent that:- (a) the principle of res judicata does not apply in revenue matters [Reliance on 1981 ELT 328 (Delhi)-J.K. Synthetics Ltd. v. Union of India] ; (b) in any view, the decision, in 1980 ELT 593 aforesaid, was not inter partes, since the units at Satna and Chittorgarh, though owned by the Appellant, had different licences and have, accordingly to be looked upon as different entities or manufacturers ; and (c) the Supreme Court's order in the aforesaid S.L.P. filed against the aforesaid decision of the Madhya Pradesh High Court was a mere dismissal simpliciter and no reasons having been given, it cannot operate as res judicata.
5. On the submissions made and on perusal of the records and otherwise, it would appear to us that :- (a) the Respondent's reliance on supra, was misplaced. It is not correct to say that the decision is an authority for the proposition that the principle of res judicata is totally inapplicable to tax matters. The ratio of the said decision, if properly understood, is quite to the contrary. It was categorically laid down therein that, while it has been held that the principle of res judicata as such will not apply in tax matters, still, an earlier decision on any issue, inter partes, in a previous assessment year is a cogent factor in the determination of the same issue in a succeeding year, unless there are good and cogent reasons for coming to a different conclusion. Relying on the ratio in Sneath's case and a plurality of the decisions of the Hon'ble Supreme Court, their Lordships of the Delhi High Court, read a limitation into the rule of inapplicability of the principle of a res judicata and estoppel in tax matters-while the earlier decision is not conclusive or immutable, it can be ignored or brushed aside or departed from only for good and cogent reasons. As one of us had occasion to hold in 1984 (16) ELT 389 (Entremonde Polyecoaters Pvt. Ltd. v. Collector of Central Excise}, the purport of the decision was that notwithstanding the rule that the principles of res judicata and estoppel are inapplicable to tax cases, a decision in assessment is not to be departed from capriciously. There should be fresh facts, or change in the law or a failure to notice material facts or considerations to warrant any departure from the earlier decisions. The Tribunal as well, in 1984 ECR-658 (M/s Nuchem Plastics v. Collector of Central Excise, Delhi) had understood the purport of the judgments of the Delhi High Court in 1981 ELT 114 (Bawa Potteries v. Union of India) and 1981 ELT 328 (J.K. Synthetics Ltd. v. Union of India to be that while principles or res judicata will not apply generally in tax matters, an earlier decision will still be a cogent factor in the determination of the same point in a subsequent period (para 21 of the aforesaid Order of the Tribunal) ; (b) admittedly, the Petitioner in the Writ Petition decided, ultimately, by the Supreme Court in SLP is the Appellant before us owning the unit at Chittorgarh as well. It is the Birla Jute Manufacturing Co. itself that carries on business even in Chittorgarh in the name and style of Birla Cement Works. When, once this is so, the mere requirement of separate licences for manufacture for different units located within the jurisdiction of a plurality of excise collectorates for administrative convenience, does not, ipso facto, mean and imply that such units, each one of them, independent of the other, are the owner of all of them. Unless it is established that the Birla Cement Works at Chittorgarh had, during the relevant period, an independent corporate existence altogether separate from the Appellant, it cannot be contended that the decision of the Supreme Court in the aforesaid SLP is not inter panes. This, obviously, has not been the case of the Respondent at all ; (c) (i) while the Madhya Pradesh High Court had, in 1982 ELT 97 (Shree Synthetic Ltd., Ujjain v. Union of India) held that a dismissal simpliciter of a SLP on merits cannot be a declaration of the law in terms of Article 141 of the Constitution, the Andhra Pradesh High Court held in 1984 (17) ELT 217 (AP) (Sirpur Paper Mills Ltd. v. Union of India), categorically to the contrary, that, when the Supreme Ccurt records its order of dismissal on merits, it must be taken to have been a decision on merits ; (ii) if one may say so, the question is not if, by the laconic dismissal, the Supreme Court had declared the law in terms of Article 141 of the Constitution, but. if the issues requiring determination in the lis had been finally and conclusively decided by the dismissal of the SLP, whether on merits or otherwise ; (iii) even where the dismissal of an Appeal is not on merits but on some preliminary grounds like limitation or default in printing, what was res subjudice in consequence of filing an appeal reassumes the character of res judicata which it had but for such Appeal on its dismissal. The dismissal of the Appeal operates as res judicata once again since the Appellate Court must be deemed to have heard and finally decided the matter. In such a case, the result of the decision of the Court of Appeal is to confirm the decision of the Court below given on merits ; [AIR 1966 SC 1322-Sheodhan Singh v. Daryao Kumar] ; (iv) were it not so, the result would be that even though the decision of the Trial Court given on merits is confirmed by the dismissal on a preliminary ground, there can never be res judicata.
The finality in the decision of any adjudicating forum can be destroyed by the simple expedient of lodging an appeal, which is later allowed to be dismissed in default of appearance or on same preliminary issue [AIR 1966 SC 1322].
6. For the aforesaid reasons, we find no substance in the contention of the Respondent that the principle of res judicata did not govern the instant proceedings. Without, therefore, going into any other question, we hold that the decision of the Supreme Court dismissing the SLP (Civil) No. 11044-45 of 1980 of the Union of India against the decision of the Madhya Pradesh High. Court in supra operates as res judicata in these proceedings and the Revision now heard as an Appeal has accordingly to be allowed, regardless of any other contention that could be advanced on merits.