Electrosteel Casting Limited v. Commissioner of CGST & CX: A Procedural Reminder from the Apex Court.


10 November 2025 Central Excise >> Tax Laws  

While dismissing an appeal by the Revenue in SLP(C) No. 28649/2025, the Supreme Court of India on 10 November 2025 once again underlined the need for procedural discipline in appellate proceedings under Section 35-G of the Central Excise Act, 1944. The dispute involved an interest on delayed refund matter wherein a favourable order passed by the Customs, Excise and Service Tax Appellate Tribunal was stayed by the High Court of Calcutta without even framing any substantial question of law.

It was observed by the Bench comprising Justice J.B. Pardiwala and Justice K.V. Viswanathan that when a High Court entertains an appeal under Section 35-G, it has to first consider whether any substantial question of law arises. Only on framing such questions can interim or substantive orders be passed. Granting a stay prior to determination, the Court held, may prejudice the assessee without proper legal foundation.

 

 

The dispute involved a claim by Electrosteel for interest on refund amounts relating back to 2012, which were rejected without issuing a show cause notice. The CESTAT had ordered the payment of 9 percent interest, thus following the reasoning in Ranbaxy Laboratories Ltd. v. Union of India, but implementation of the said relief was delayed due to an interim stay by the High Court.

At the time of disposal of the SLP, the Supreme Court did not interfere with the matter substantively but directed the Calcutta High Court to consider and dispose of the appeal within a month, preferably on 17 November 2025, as already scheduled. The order underlines judicial discipline and the procedural hierarchy built into the appellate tax proceedings.

Thus, although short, this order sends a strong signal that while exercising powers under Section 35-G, High Courts must keep strict adherence to statutory procedure and cannot prejudge the case before forming an opinion regarding the substantial question of law. As regards the litigants, the implication is that it is necessary to point out procedural lapses at the earliest to safeguard substantive rights.


Section 35G, Central Excise Act - 1944  

Central Excise Act, 1944