Bombay High Court
Vodafone India Ltd vs The Commissioner Of Service Tax, ... on 10 September, 2015
Bench: S.C. Dharmadhikari
CEXA126.15.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
CENTRAL EXCISE APPEAL NO.126 OF 2015
WITH
NOTICE OF MOTION NO.868 OF 2015
IN
CENTRAL EXCISE APPEAL NO.126 OF 2015
WITH
CENTRAL EXCISE APPEAL NO.127 OF 2015
WITH
NOTICE OF MOTION NO.869 OF 2015
IN
CENTRAL EXCISE APPEAL NO.127 OF 2015
Vodafone India Ltd. ... Appellant
v/s
The Commissioner of Central Excise,
Mumbai II ... Respondent
Mr Harish Salve, Sr. Counsel i/b M/s Duttmenon Dunmorrsett for the
Appellant.
Mr Pradeep S. Jetly with Mr Jitendra B. Mishra for Respondent.
CORAM: S.C. DHARMADHIKARI &
B.P. COLABAWALLA JJ.
Reserved On : 1st September, 2015
Pronounced On : September, 2015
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Judgment:- [ Per B. P. Colabawalla J. ] :-
1. These Appeals, filed under section 35G of the Central
Excise Act, 1944 read with section 83 of the Finance Act 1994, take
exception to the final order dated 16th March, 2015 ("impugned
order") passed by the Customs, Excise and Service Tax Appellate
Tribunal, Mumbai ("CESTAT"). In a nutshell, CESTAT confirmed
the order of the Commissioner (TAR), Mumbai, who held that the
Appellant was not entitled to claim CENVAT credit of duty paid on
towers (in CKD/SKD form), parts of towers, shelters / prefabricated
buildings (for short the "said goods") purchased by them and used
for providing output service. In both the Appeals, the Appellant and
the Respondent are one and the same and the questions of law, as
framed, are also identical. The only difference between the two
Appeals is the period for which the Appellant had availed of
CENVAT credit and which was now being demanded and recovered
from them under Rule 14 of the "CENVAT Credit Rules, 2004" r/w
section 73 of the Finance Act 1994, alongwith interest and penalty. In
these circumstances, both the Appeals are being disposed of, by
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consent of parties, by this common order and judgment. For the sake
of convenience, we shall refer to the facts in Central Excise Appeal
No.127 of 2015.
2. According to the Appellant, these Appeals give rise to the
following substantial questions of law:-
(a) Whether in the facts and circumstances of the case the
Tribunal has erred in law by adding an additional condition
through interpretation in Rule 2(k) of the CENVAT Credit
Rules, 2004 being that the goods that are used for providing
output services should not be embedded in earth?
(b) Whether the Tribunal has erred in law in interpreting Rule
2(k) of the CENVAT Credit rules 2004 which clearly
provides that 'all goods' 'used' for providing any output
service is eligible for credit and therefore, towers and pre-
fabricated shelters which are received as goods ought to be
allowed as credit for utilization under the CENVAT Credit
Rules 2004 ?
(c) Whether the Tribunal has erred in law in not appreciating
that goods which do not fall under the definition of capital
goods continue to fall under the definition of input and,
therefore, are eligible for credit under the CENVAT Credit
Rules 2004 ?
(d) Whether in the facts and circumstances of the case, the
Hon'ble appellate Tribunal was correct and justified in
applying the ratio of the Bharti Airtel Ltd. in disallowing the
credit to the appellant when the said decision is
distinguishable on various counts as argued before the
Hon'ble Appellate Tribunal ?
(e) Whether the Tribunal committed a fundamental error in not
appreciating that shelter / parts of tower and the tower
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would qualify as inputs under the scheme of the CENVAT
Credit Rules 2004 which are integral to the provision of
output service ?
(f) Whether in the facts and circumstances of the case, the
Hon'ble Appellate Tribunal was correct and justified in
holding that the Appellant was not entitled to credit of duty
paid on tower parts / shelter on the ground that tower /
shelter is 'immovable property' and hence, do not qualify as
'capital goods' on 'inputs' as defined under the CENVAT
Credit Rules 2004 ?
(g) Whether in the facts and circumstances of the case, the
Hon'ble Appellate Tribunal erred in not appreciating that
the towers (in CKD and SKD form), parts of tower / shelter
would qualify as components, parts and accessories of
goods falling under Chapter 85 ?
(h) Whether in the facts and circumstances of the case the
Hon'ble Appellate Tribunal erred in not appreciating that
for the purposes of availing credit under the CENVAT
Credit Rules, towers (in CKD and SKD form) and parts of
the towers were goods when received and credit was taken
and it is immaterial whether the same were erected later ?
(i) Whether the Hon'ble Appellate Tribunal erred in not
considering and appreciating the technical literature and
evidence placed before it showing that both the towers and
the shelters were capable of being shifted or moved and
rendering perverse findings ?
(j) Whether in the facts and circumstances of the case, the
Hon'ble Appellate Tribunal erred in not appreciating that
towers were accessories to the capital goods ?
(k) Whether the Tribunal erred in law to appreciate that the
identity of towers and pre-fabricated buildings / shelters are
not lost merely when they are embedded in the earth prior
to use and continue to qualify as 'inputs' under Rule 2(k) of
the CENVAT Credit Rules 2004 ?
(l) Whether the Tribunal erred in law in appreciating that there
is no embargo under Rule 2(k) of the CENVAT Credit Rules,
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2004 in relation to the manner in which goods ought to be
used for providing any output service and therefore, even
upon installation as a part of an overall system they can
qualify as inputs for rendition of output services ?
(m) Whether the Tribunal failed to appreciate that even the
capital goods can fall under definition of 'inputs' and are,
therefore, eligible for credit under Rule 2(k) of the
CENVAT Credit Rules, 2004 ?
(n) Whether the Tribunal failed to appreciate that the process
of embedding the Towers and pre-fabricated buildings /
shelters is not a permanent process and the same can be
removed and reinstalled at another location and they are
merely embedded for proper functioning and, therefore, are
not immovable property ?
(o) Whether the fact finding of the Tribunal is perverse in so far
as it failed to appreciate that Towers and pre-fabricated
buildings / shelters under common trade parlance are
regarded as 'goods' and, therefore, credit will be allowed on
such Towers and pre-fabricated buildings / shelters under
the CENVAT Credit Rules, 2004 as either capital goods or
inputs ?
(p) Whether the Tribunal failed to appreciate that Towers and
pre-fabricated buildings / shelters in common trade
parlance are known as parts of base station and are,
therefore, liable to be classified under Chapter 85 of the
Central Excise Tariff Act and consequently eligible for
credit under the CENVAT Credit Rules, 2004 ?
3. To decide the present controversy, it would be necessary
to refer to some basic facts. The Appellant is inter alia engaged in the
business of providing telecom services under the category
'telecommunication services' within the telecom circles of Mumbai. It
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is the case of the Appellant that during the course of its business, it is
required to set up various equipments which are integral to, and used
for providing such services. Such equipments are essential and an
integral part of the telecom service delivery across the world and is
the backbone of the telecom service. Such infrastructure includes
public switching equipment, transmission equipment and various
customer premises equipment. At the heart of the whole
infrastructure is the Base Transceiver Station (BTS) which facilitates
wireless communication between the customers equipment (eg.
mobile phones) and the main network. The general architecture of the
BTS system involves various equipment such as antennae, towers,
pre-fabricated buildings etc. and all these, in combination, are used by
the Appellant in delivering telecom services to its customers.
4. According to the Appellant, in its ordinary course of
business, it had availed of CENVAT credit for duty paid on inputs
and capital goods as well as availed of credit of service tax paid on
input services used for providing output service, and utilised the same
for discharging their output service tax liability. The Appellant had
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inter alia availed of CENVAT credit for duty paid on towers (in
CKD/SKD form), parts of towers, shelter / prefabricated buildings
purchased by them and used for providing output service.
5. As the statutory authorities were of the view that the
Appellant is not entitled to avail of CENVAT credit under the
"CENVAT Credit Rules 2004", show cause notices were issued to the
Appellant for the period from 2005-2006 to 2010-2011, the details of
which are given at paragraph 11 of the Memo of Appeal. These show
cause notices were replied to by the Appellant denying all the
allegations set out therein and contending that the said goods were
capital goods and / or in the alternative, should be treated as inputs
and therefore they were entitled to claim CENVAT credit. Thereafter,
the Commissioner (TAR), Mumbai, after granting the Appellant a
personal hearing, adjudicated the said show cause notices and by his
order dated 30th October 2012, confirmed the demand therein
alongwith interest and penalty. As far as the demand to the extent of
Rs.45,05,15,200/- was concerned, the same was dropped on account
of duplication in computation of two show cause notices dated
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31.03.2009 and 22.04.2010 respectively.
6. Being aggrieved by this order of the Commissioner, the
Appellant preferred an Appeal before the CESTAT under section 86
of the Act and also filed a stay application therein. This Appeal was
disposed of by CESTAT by its judgment and order dated 16th March,
2015 inter alia confirming the order of the Commissioner (TAR),
Mumbai. Being aggrieved by this order of CESTAT, the Appellant is
before us.
7. In this factual background, Mr Salve, learned Senior
Counsel appearing on behalf of the Appellant, firstly contended that
CESTAT erred in coming to the finding that the towers / pre-
fabricated buildings (the said goods) of the Appellant, and on which
CENVAT credit was claimed, are immovable properties. To classify
the said goods as immovable properties, attachment thereof to the
land has to be for the permanent beneficial enjoyment of the land and
should not have a separate existence devoid of the land, was the
submission of Mr. Salve. In support of this proposition, Mr Salve
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relied upon a decision of the Supreme Court in the case of
Commissioner of Central Excise, Ahmedabad v/s Solid and Correct
Engineering Works and others.1 According to Mr Salve, in the
present case, the said goods of the Appellant did not satisfy this test
and therefore, could never be termed as immovable property. In this
regard, he also invited our attention to the affidavit of Ms. Srabasti
Bhattacharjee dated 07.01.2015 filed on behalf of the Appellant
before the CESTAT. This affidavit sets out details of how a new
tower is set up, preparation of its civil foundation and erection, and
how it is dismantled.
8. In the alternative, Mr Salve submitted that in any event of
the matter, there was no generic difference between 'capital goods'
and other 'goods' other than their treatment in relation to their use in
manufacture. According to Mr. Salve, there is no difference in
relation to the use of any 'goods' in relation to provision of output
service. In this regard, he drew our attention to the definition of the
words 'capital goods' and 'input' appearing in rule 2(a)(A) and rule
1 (2010) 5 SCC 122
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2(k) of the CENVAT Credit Rules, 2004 respectively. According to
Mr Salve, in the facts of the present case, and looking to the definition
of the word 'input', only two conditions need to be satisfied for the
Appellant to avail of CENVAT credit. These are (a) the CENVAT
credit is claimed for goods in relation to the tax paid on the goods;
and (b) the said goods are used for providing output service.
According to Mr Salve, at the time the input duty is paid, the duty
should relate to the goods acquired by the service provider.
Thereafter, if the goods are required to be fastened to immovable
property to facilitate their use, would not by itself, make them lose
their character as 'goods', was the submission of Mr Salve.
9. Mr Salve, in his usual fair manner, pointed out to us a
decision of a Division Bench of this Court in the case of Bharti Airtel
Ltd. v/s Commissioner of Central Excise, Pune - III,2 to which one
of us (S.C. Dharmadhikari J.) was the party. He submitted that
though a Division Bench of this Court in Bharti Airtel's case has
taken the view that the telecom service provider is not entitled to
2 2014 (35) S.T.R. 865 (Bom.)
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CENVAT credit for the duty paid on the said goods on the ground
that it is immovable property and hence, do not qualify as 'capital
goods' or 'inputs', the same required a relook in view of the fact that
the submissions now made before us were either not made nor
considered in the case of Bharti Airtel Ltd.2 For all the aforesaid
reasons, Mr Salve submitted that these Appeals raise substantial
questions of law that need to be considered by this Court and a
finding be rendered thereon.
10. On the other hand, Mr Jetly, learned counsel appearing on
behalf of the Respondent, submitted that the issues raised and the
questions of law as projected in the Appeals, are squarely covered by
the judgment of this Court in Bharti Airtel's case.2 He submitted that
after lengthy arguments and considering the law on the subject, this
Court has come to the conclusion that a telecom service provider is
not entitled to credit of duty paid on towers (in CKD and DKD form),
parts of towers, shelter / prefabricated buildings allegedly used by the
Appellant for providing output service. He submitted that the
Division Bench in Bharti Airtel's case2 has considered all the issues
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and therefore, the present Appeals raise no substantial questions of
law that need to be considered by us. He therefore submitted that the
Appeals were meritless and ought to be dismissed.
11. With the help of learned counsel for both sides, we have
perused the papers and proceedings in both the Appeals as well as the
common order impugned therein. It is to be noted that in Bharti
Airtel's case2, the identical issue as the one canvassed before us, was
raised before this Court. The substantial questions of law that were
framed by this Court in Bharati Airtel's case2 are as under:-
"1) Whether in the facts and circumstances of the case, the
Appellate Tribunal was correct and justified in holding that
the appellant was not entitled to credit of duty paid on tower
parts, green shelter, printers and office chairs ?
2) Whether in the facts and circumstances of the case, the
Appellate Tribunal was correct and justified in holding that
the appellant was not entitled to credit of duty paid on tower
parts, green shelter on the ground that tower / green shelter
is 'immovable property' and hence, do not qualify as 'capital
goods' or 'inputs' as defined under the Cenvat Credit Rules,
2004 ?
3) Whether in the facts and circumstances of the case, the
appellate Tribunal was correct and justified in holding that
tower would not qualify as 'part' or 'component' or
'accessory' of the capital goods i.e. antenna ?"
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12. On these questions of law, as framed, this Court at
paragraph 16 noted the arguments canvassed on behalf of M/s Bharti
Airtel Ltd. In a nutshell, and so far as they are relevant for our
purposes, the arguments of the Appellants therein were as follows:-
(a) The Tribunal has misinterpreted the application of
CENVAT Credit Rules, 2004 in rejecting the
Appellant's claim to avail credit of the duty paid on
the towers and parts thereof, prefabricated shelters
and the printers. The goods in question clearly fall
within the ambit of the definition of "capital goods"
under rule 2(a)(A) of the Cenvat Credit Rules 2004;
(b) that in the alternative, the goods in question fall
within the definition of "input" under rule 2(k) of
the Credit Rules. The tower and shelter were
received by the Appellants in knocked down
condition (CKD) and were used for providing
telecom services and hence these goods qualify as
"inputs" in terms of rule 2(k) of the Credit Rules.
Rule 2(k)(2) uses the words "all goods" which are
"used for providing any "output service" and
therefore, these goods completely fall within the
purview of rule 2(k) so as to mean inputs;
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(c) that a combined reading of these definitions, read
with rules 3 and 4 of the Credit Rules, entitle the
Appellants to avail the credit of duty paid on
purchase of these goods, and the Appellant's case
was fully covered under Rule 3 of the CENVAT
Credit Rules 2004;
(d) The contention of the Revenue that after the use of
the towers and parts thereof and PFB, they have
become "immovable", is misconceived and credit
cannot be denied accepting this contention. In
support of this submission, reliance was placed on
several decisions of the Supreme Court and various
High Courts;
(e) that capital goods viz. Antenna and BTS are fitted
into the tower and shelter to provide
telecommunication services and therefore, they
qualify as inputs under Rule 2(k);
(f) that it is impossible to conceive that the
telecommunication services can be provided
without towers and shelters and that necessity or the
functional utility test is required to be applied.
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13. Several other arguments were also noted in paragraph 16
of Bharti Airtel's decision2. Thereafter, this Court at paragraph 19
took note of the relevant provisions viz. the definition of the words
'capital goods' [Rule 2(a)(A)], 'input' [Rule 2(k)] and Rule 3 which
inter alia provides under what circumstances CENVAT Credit can be
availed of. After noting the aforesaid provisions and a lengthy
discussion in relation thereto, this Court in Bharti Airtel's case2 held
that the said goods are neither 'capital goods' as defined in rule
2(a)(A) of the CENVAT Credit Rules, 2004 and nor do they fall
within the definition of 'input' as defined in rule 2(k) thereof. This
Court has further held that in any event the towers and parts thereof
are in the nature of immovable property and are non-marketable and
non-excisable and therefore, they cannot be classified as 'inputs' so as
to fall within the definition of rule 2(k) of the CENVAT Credit Rules,
2004. The relevant portion of Bharti Airtel's decision2 reads thus:-
"23. In the context of these definitions the contentions as raised by
the appellant are required to be examined. The position of the
goods in question vis-a-vis the plain application of the rules is that
the tower and parts thereof are fastened and are fixed to the earth
and after their erection become immovable and therefore cannot
be goods. Further in the CKD or SKD condition the tower and
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parts thereof would fall under the chapter heading 7308 of the
Central Excise Tariff Act. Heading 7308 is not specified in clause
(i) or clause (ii) of rule 2 (a)(A) of the Credit Rules so as to be
capital goods. The goods in question would not be capital goods
for the purpose of CENVAT credit as they are neither components,
spares and accessories of goods falling under any of the chapters
or headings of the Central Excise Tariff Schedule as specified in
sub-clause (i) of the definition of capital goods.
***************
31. In the light of the aforesaid discussion we examine whether on
the rules as they stand the appellants would be entitled to the
credit of the duty paid on the item in question on the output service
namely the cellular service. We may observe that a plain reading
of the definition of 'capital goods' as defined under Rule 2(a)(A) of
the Credit Rules show that all goods falling under Chapter 82,
Chapter 84, Chapter 85, Chapter 90, heading No.6805, grinding
wheels and the like, and parts thereof falling under heading 6804
of the First Schedule to the Central Excise Tariff Act; pollution
control equipments; components, spares and accessories of the
goods specified at sub clauses (i) and (ii) which are used either in
the factory for manufacture of final products but does not include
any equipment or appliance used in the office and those used for
providing output service. Further in the CKD or SKD condition the
tower and parts thereof would fall under the chapter heading 7308
of the Central Excise Tariff Act. Heading 7308 is not specified in
clause (i) or clause (ii) of rule 2 (a)(A) of the Credit Rules so as to
be capital goods. Further the Appellants contention that they were
entitled for credit of the duty paid as the Base Transreceiver
Station (BTS) is a single integrated system consisting of tower,
GSM or Microwave Antennas, Prefabricated building, isolation
transformers, electrical equipments, generator sets, feeder cables
etc. and that these systems are to be treated as "composite system"
classified under Chapter 85.25 of the Tariff Act and be treated as
'capital goods' and credit be allowed, also is not acceptable. It is
clear that each of the component had independent functions and
hence, they cannot be treated and classified as single unit. It is
clear that all capital goods are not eligible for credit and only
those relatable to the output services would be eligible for credit.
The goods in question in any case cannot be held to be capital
goods for the purpose of CENVAT credit as they are neither
components, spares and accessories of goods falling under any of
the chapters or headings of the Central Excise Tariff Schedule as
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specified in sub-clause (i) of the definition of capital goods. Hence
a combined reading of sub-clause (a)(A) (i) and (iii) and sub-rule
(2) indicates that only the category of goods in Rule 2(a)(A) falling
under clause (i) and (iii) used for providing output services can
only qualify as capital goods and none other. Admittedly the goods
in question namely the tower and part thereof, the PFB and the
printers do not fall within the definition of capital goods and hence
the appellants cannot claim the credit of duty paid on these items.
Even applying the ratio of the judgments as relied upon by the
appellants as observed above the said goods in the present context
cannot be classified as capital goods.
32. As regards second contention of the appellants that the tower
and part thereof, the PFB and the printers would also falls under
the definition of 'input' as defined Rule 2(k) also cannot be
sustained. The definition of inputs as defined under rule 2(k)
includes all goods, except light diesel oil, high speed diesel oil,
motor spirit, commonly known as petrol, used in or in relation to
the manufacture of final products whether directly or indirectly
and whether contained in the final product or not and includes
lubricating oils, greases, cutting oils, coolants, accessories of the
final products cleared along with the final product, goods used as
paint, or as packing material, or as fuel, or for generation of
electricity or steam used in or in relation to manufacture of final
products or for any other purpose, within the factory of
production, and as provided in sub-clause (ii) all goods except
light diesel oil, high speed diesel oil, motor spirit, commonly
known as petrol and motor vehicles, used for providing any output
service. Explanation (2) of sub-rule (k) is also which provides that
input include goods used in the manufacture of capital goods
which are further used in the factory of the manufacturer. A plain
reading of the definition of input indicates that in the present
context, clause (i) of Rule 2 (k) may not be of relevance as same
pertains to manufacturing activity and pertains to goods used in
relation to manufacture of final product or any other purpose
within the factory of production. Sub-clause (ii) has been referred
to as relevant by the appellant as the same pertains to goods
except light diesel oil, high speed diesel oil, motor spirit,
commonly known as petrol and motor vehicles, used for providing
any output service. Tower and parts thereof are fastened and are
fixed to the earth and after their erection become immovable and
therefore cannot be goods.
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33. The alternative contention of the appellant is that tower is an
accessory of antenna and that without towers antennas cannot be
installed and as such the antennas cannot function and hence the
tower should be treated as parts and components of the antenna. It
is urged that antennas fall under chapter 85 of the schedule to the
Central Excise Tariff Act and hence being capital goods used for
providing cellular service falling under rule 2(a)(A)(iii) as part of
capital goods falling under rule 2(a)(A)(i) towers become
accessories of antenna and should be held as capital goods for
availing of credit of duty paid. The argument at the first blush
appeared to be attractive however a deeper scrutiny shows that the
same is without substance. It would be misconceived and absurd to
accept that tower is a part of antenna. An accessory or a part of
any goods would necessarily mean such accessory or part which
would be utilized to make the goods a finished product or such
articles which would go into the composition of another article.
The towers are structures fastened to the earth on which the
antennas are installed and hence cannot be considered to be an
accessory or part of the antenna. The position in this regard stands
fortified from the decision of the Supreme Court in the case of
"Saraswati Sugar Mills vs CCE Delhi, (2011 (270) ELT 465)".
From the definition of the term 'input' as defined in 2 (k) of the
Credit rules it is clear that the Appellant is a service provider and
not a manufacturer of capital goods. A close scrutiny of the
definition of the term capital goods and input indicates that only
those goods as used by a manufacturer would qualify for credit of
the duty paid. As observed hereinabove a service provider like the
appellant can avail of the credit of the duty paid only if the goods
fall within the ambit of the definition of capital goods as defined
under Rule 2(a)(A) of the Credit Rules. The contention of the
appellant that they are entitled for the credit of the duty paid
towers and PFB and printers is defeated by the very wording of the
definition of input. In any case towers and PFB are in the nature of
immovable goods and are non-marketable and non-excisable. If
this be the position then towers and parts thereof cannot be
classified as inputs so as to fall within the definition of Rule 2(k) of
the credit rules. We clarify that we are not deciding any wider
question but restricting our conclusion to the facts and
circumstances which have fell for our consideration in these
appeals."
(emphasis supplied)
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14. On carefully going through the decision in Bharti Airtel's
case2 we find that the said decision squarely applies to the case of the
Appellant before us. We find that this Court has considered all
aspects of the matter and then come to the conclusions that it did. Mr
Salve, despite all the finesse at his command, was unable to persuade
us to hold that the decision in Bharti Airtel's case2 requires a relook.
The very provisions that were relied upon by Mr Salve, were
considered and interpreted by the Division Bench in Bharti Airtel's
case2. Not only are those findings binding on us but we are in full
agreement with the same. Once the very rules that have been relied
upon by Mr Salve, are interpreted by the Division Bench of this
Court, judicial discipline demands that this interpretation be followed
by us. It is now quite well settled that an interpretation of a statutory
provision, and equally a misinterpretation, by one Bench of the High
Court would be binding on a coordinate Bench of that very High
Court. The subsequent Bench cannot come to the opinion that a
particular provision was misinterpreted and under that pretext seek to
reinterpret it again. If the subsequent Bench is of the view that the
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statutory provisions are misconstrued and / or misinterpreted, the only
recourse available to it would be to refer it to a larger Bench. In the
present case, we see no reason to adopt this course of action. We are
in full agreement with the reasoning given in Bharti Airtel's case2 and
therefore, are unable to accept the submissions of Mr Salve that the
aforesaid decision requires a relook. If for any reason, the Appellant
is of the opinion that the decision in Bharti Airtel's case2 does not lay
down the correct law, then the remedy to correct the same lies before
a Superior Court. On the issue of a binding precedent, it would be
apposite to refer to the observations of the Supreme Court in the case
of State of Gujarat v. R.A. Mehta3 which read thus:-
"Binding effect of the judgment
61. There can be no dispute with respect to the settled legal
proposition that a judgment of this Court is binding, particularly
when the same is that of a coordinate Bench or of a larger Bench.
It is also correct to state that even if a particular issue has not
been agitated earlier or a particular argument was advanced but
was not considered the said judgment does not lose its binding
effect, provided that the point with reference to which an argument
is subsequently advanced has actually been decided. The decision
therefore, would not lose its authority "merely because it was
badly argued, inadequately considered or fallaciously reasoned".
The case must be considered taking note of the ratio decidendi of
the same i.e. the general reasons or the general grounds upon
which the decision of the court is based, or on the test or abstract
from the specific peculiarities of the particular case which finally
gives rise to the decision. (Vide Somawanti v. State of Punjab [AIR
3 (2013) 3 SCC 1
VRD 20 of 22
CEXA126.15.doc
1963 SC 151] , Ballabhadas Mathurdas Lakhani v. Municipal
Committee, Malkapur [(1970) 2 SCC 267 : AIR 1970 SC 1002]
, Ambika Prasad Mishra v. State of U.P. [(1980) 3 SCC 719 : AIR
1980 SC 1762] , SCC p. 723, para 6 and Director of
Settlements v. M.R. Apparao [(2002) 4 SCC 638 : AIR 2002 SC
1598] .)"
(emphasis supplied)
15. To be fair to Mr Salve, we must mention here that the
decision in Bharti Airtel's case2 has been challenged before the
Supreme Court in Civil Appeal Nos.10409 and 10410 of 2014 in
which notice has been issued and the Supreme Court has ordered that
these Civil Appeals be tagged with Civil Appeal Nos.5698 and 5699
of 2012 arising out of SLP (Civil) Nos.22864 and 22865 of 2011
[Commr. Of Cen. Exc. Vishakhpatnam Vs. M/s. Sai Samhita
Storages P. Ltd.]. However, as far as we are concerned, the issue
stands concluded by the decision of this Court in Bharti Airtel's
case.2
16. In view of our discussion earlier in this judgment, we find
that the issues raised in the present Appeals are squarely covered by
the decision of this Court in Bharti Airtel's case2 and therefore raise
VRD 21 of 22
CEXA126.15.doc
no substantial questions of law that need to be answered by us. In this
view of the matter, we find no merit in these Appeals. They are
accordingly dismissed. However, in the facts and circumstances of
the case, we leave the parties to bear their own costs.
(B.P. COLABAWALLA, J.) (S.C.DHARMADHIKARI J.)
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