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April 2016

[2016] 66 taxmann.com 133 (Karnataka HC) – Commissioner of Service Tax, Bangalore vs. Kyocera Wireless (I) (P) Ltd.

By Puloma Dalal
Jayesh Gogri
Mandar Telang Chartered Accountants
Reading Time 2 mins
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Method of passing final order by making reference to paragraphs of common “interim order” passed by clubbing various cases on similar issues, is held to be invalid.

Facts
With a view to reduce pending appeals on identical issues relating to refund of CENVAT credit under Rule 5 of CENVAT Credit Rules, 2004, the Tribunal passed a common interim order by clubbing nearly 192 cases, and treating those cases as partly heard. Based on the said order, a final order was passed. Appellant contended that Tribunal erred in deciding the appeal in line with the observations made in the interim order, which is not in accordance with the law.

Held:
The Hon’ble High Court held that scope of interim order is very limited as it is temporary and effective only during the pendency of litigation and ceases to exist as soon as the final order is passed. No law can be laid down in an interim order and hence, passing final order referring to the paragraphs in the interim order is not a speaking order. Accordingly, it was held that passing a common interim order and applying the same to the final order of the individual cases is strange and contrary to the settled principles of law. It however suggested that instead of referring to interim order, the Tribunal can pass final order in one case and adopt the same in other batch of cases.

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