Doctrine of Merger: Dismissal of Appeal on ground of limitation – No Merger of order – Central Excise Act:

The assessee, a manufacturer of excisable goods, purchased for its manufacturing activity certain capital goods and availed of MODVAT credit by filing a declaration before the adjudicating authority along with an application for condonation of delay. Rejecting the claim, the adjudicating authority directed the assessee to pay the excise duty credit of which it had availed of. The first appellate authority dismissed the appeal filed by the assessee on the ground of delay which he could not condone. The Tribunal, on appeal, confirmed the order passed by the first appellate authority. Thereafter, the assessee filed an application for rectification before the Tribunal on the ground that the Tribunal ought to have considered the assessee’s appeal not only on the ground of limitation, but also on the merits of the case. The Tribunal rejected the application. The reference application filed by the assessee to direct the Tribunal to state case and the question of law, was dismissed by the High Court. On further appeal, the assessee contended that though the first appellate authority had rejected the appeal filed by the assessee on the ground of limitation, the orders passed by the original authority would merge with the orders passed by the first appellate authority and, therefore, the Tribunal ought to have considered the appeal filed by the assessee not only on the ground of limitation but also on the merits of the case.

The Court observed that if for any reason an appeal is dismissed on the ground of limitation and not on merits, that order would not merge with the order passed by the first appellate authority.

Accordingly, it was held in the appeal, that the high court was justified in rejecting the request made by the assessee for directing the revenue to state the case and also the question of law for its consideration and decision. Appeal was accordingly dismissed.