Karnataka High Court Clarifies MACP Benefit for Central Excise Officers; Makes Pay Upgradation Subject to SC Outcome

The Karnataka High Court has disposed of a batch of writ petitions filed by the Union of India challenging an order of the Central Administrative Tribunal (CAT), Bengaluru, which had granted the benefit of the third financial upgradation under the Modified Assured Career Progression (MACP) Scheme to several officers of the Central Excise Department. The Court clarified that the benefit granted to the officers would remain subject to the final outcome of a related case pending before the Supreme Court. The Bench of Justice P.S. Dinesh Kumar and Justice M.G. Uma has observed that the Government had earlier complied with directions issued by the Madras High Court in the Chandrashekaran case based on the opinion of the Department of Personnel and Training (DoPT). At the same time, the Government was also pursuing an appeal against that judgment before the Supreme Court. The respondents in the case were officers of the Central Excise Department who had initially joined service as Inspectors. Over time, they were granted financial upgradations under the Assured Career Progression (ACP) Scheme and later under the MACP Scheme. According to the record, the officers had received their first financial upgradation in Pay Band-2 with a Grade Pay of ₹4,800. They were subsequently promoted as Superintendents and later granted a Non-Functional Grade (NFG) in Pay Band-2 with Grade Pay of ₹5,400 after completing four years in the post. They were also granted a second financial upgradation in Pay Band-3 with the same Grade Pay of ₹5,400 and eventually a third financial upgradation under the MACP Scheme with Grade Pay of ₹6,600 in Pay Band-3 upon completion of 30 years of service. However, the Department later issued show-cause notices proposing withdrawal of the third MACP benefit. The authorities argued that the Non-Functional Grade of ₹5,400 granted earlier should be treated as a financial upgradation, and therefore the officers were not entitled to a further MACP benefit. Based on this reasoning, the Commissioner of Central Excise passed orders withdrawing the third financial upgradation and also directed recovery of the excess pay and allowances that had been granted. Aggrieved by the withdrawal, the officers approached the Central Administrative Tribunal, Bengaluru Bench. The Tribunal examined the issue and held that the officers were entitled to the third financial upgradation under the MACP Scheme despite having received the Non-Functional Grade earlier. The CAT set aside the departmental orders and directed restoration of the higher grade pay granted under the MACP Scheme. Before the High Court, the Union of India contended that the Tribunal had erred in allowing the officers’ claim. The Government argued that under the MACP Scheme, financial upgradations are granted based on grade pay progression rather than promotional hierarchy, and the Non-Functional Grade of ₹5,400 should be counted as one financial upgradation. On the other hand, the officers argued that similar issues had already been considered in earlier judicial decisions, including a judgment of the Madras High Court in the case of R. Chandrashekaran, where benefits under the MACP Scheme were granted in comparable circumstances. They contended that the Tribunal had correctly followed the principle of parity. The Bench observed that once the Government had extended similar benefits in compliance with judicial directions, denying the same to similarly placed employees could violate the principle of equality under Article 14 of the Constitution. The Court further remarked that matters relating to pay fixation and service benefits ordinarily fall within the domain of the executive, but uniform treatment must be ensured when employees are similarly situated. While disposing of the petitions, the High Court clarified that the benefits granted to the officers would be subject to the final outcome of the appeal pending before the Supreme Court in the Chandrashekaran case. To safeguard the interests of the Revenue, the Court directed the respondents to file an undertaking that they would refund the amount received pursuant to the third MACP upgradation if the Government ultimately succeeds before the Supreme Court. The High Court disposed of the batch of writ petitions without imposing any costs. Case Details Case Title: UOI Versus D.M. SOORI Citation: JURISHOUR-256-HC-2026(KAR) Case No.: WRIT PETITION No.9554 OF 2021 Date: 3RD JUNE, 2022 Counsel For Petitioner: B. PRAMOD, CGC Counsel For Respondent: B.S. VENKATESH KUMAR, ADVOCATE Click Here To Read Order Read More: DGGI Meerut: Court Denies Bail to Businessman Accused of Fraudulent GST Credit Claims

Karnataka High Court Clarifies MACP Benefit for Central Excise Officers; Makes Pay Upgradation Subject to SC Outcome

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