ARUN KUMAR vs M/O FINANCE, D/O REVENUE

OA No.1075 of 2026

Open Court


CENTRAL ADMINISTRATIVE TRIBUNAL
ALLAHABAD BENCH,
ALLAHABAD

th
This the 08 day of October, 2026

Original Application No. 1075 of 2026

Present
Hon'ble Mr. Justice Rajiv Joshi, Member-(Judicial)
Hon'ble Mr. Anjani Nandan Sharan, Member- Administrative)
1. Arun Kumar, age about 58 years S/o Shri Subhash Chnadra
R/o 871/7A/3, Nehru Park Road, Ramman ka Pura, Prayagraj
presently working as Superintendent, (Appeals) CGST & C.Ex.
Allahabad.

2. Ramesh Singh Yadav age about 54 years S/o Late Shri Latoo
Yadav, R/o Vill. Durgava, post- Rajvri, Varanasi Presently
working as Superintendent, CGST & C.Ex. Varanasi.

3. Pramod Kumar Pandey age about 56 years S/o Late Shri
Daya Shankar Pandey R/o Vill- Ganaideen, Post-Saraiganai,
Pratapgarh, presently working as Superintendent Range-
Hathras, Division-Aligarh, Commissionerate-Agra.

…..Applicants

By Adv: Shri Jaswant Singh

V E R S U S

1. Union of India, through the Secretary, Ministry of Finance,
Department of Revenue, Government of India, New Delhi.
2. The Central Board of Indirect Taxes and Customs, through its
Chairman, Government of India, Ministry of Finance, Department
of Revenue, New Delhi.
3. The Chief Commissioner, (Cadre Controlling Authority),
Central Goods and Services Tax (CGST) and Central Excise7-A
Ashok Marg Lucknow.
4 The Commissioner, CGST & Central Excise,
Commissionerate, GST Bhawan Sanjay Palace, Agra.
5. The Commissioner, (Appeals) CGST & Central Excise Civil
Lines, Allahabad.
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6. The Commissioner, CGST & Central Excise,
Commissionerate, 9, Maqbool Alam Road, Varanasi-221002.
7. The Pr.C.C. of Accounts, CBIC 1st floor, DGACR Building, IP
Estate, New Delhi.
8. The Pay and Accounts Officer, Central Goods and Services
Tax (CGST) and Central Excise, GST Bhawan, Sarvodaya
Nagar, Kanpur.
9. The Pay and Accounts Officer, Central Goods and Services
Tax (CGST) and Central Excise, GST Bhawan, Civil Lines,
Allahabad.
. . . Respondents
By Adv: Shri Chakrapani Vatsyayan



O R D E R


Delivered by: Mr. Justice Rajiv Joshi, Member (J)
Heard Shri Jaswant Singh, learned counsel for the
applicants and Shri Chakrapani Vatsyayan, learned counsel for
the respondents.
2. The instant Original Application, under Section 19 of the
Administrative Tribunals Act, 1985, has been filed by the
applicants, seeking following reliefs:
“a) That this Hon'ble Tribunal may graciously be pleased to hold and
declare that the retrospective promotion of the Applicants to the post
of Inspector, with effect from 06-12-2002, as granted by the
Respondents themselves pursuant to the various directions issued
from time to time and in compliance with the judgment and order dated
02.03.2005 passed by the Hon'ble High Court of Andhra Pradesh in
W.P. No. 7963/2004, which has subsequently been protected by the
Hon'ble Supreme Court in Civil Appeal Nos. 1970-1975/2009,
particularly in terms of Paragraph 119(22) of the judgment dated
05.02.2020, has attained finality and cannot be altered, withdrawn or
disturbed to the prejudice of the Applicants; and consequently, the
Applicants be held entitled to all consequential service, monetary and
retiral benefits flowing from such retrospective promotion.
b) That this Hon'ble Tribunal may graciously be pleased to extend to
the Applicants the same relief as granted in OA Nos. 1085/2018,
691/2023 and 143/2024, in respect of the same controversy, along with
all consequential benefits, the said relief having been affirmed by the
Hon'ble High Court of Judicature at Allahabad vide judgment dated
27.11.2025 in Writ-A Nos. 2491/2025, 2513/2025 and 15799/2025, and
the Special Leave Petitions preferred against the said judgment having
been dismissed by the Hon'ble Supreme Court vide order dated
17.07.2026.
c) That this Hon'ble Tribunal may graciously be pleased to hold and
declare that the Applicants are entitled to financial upgradation under
the MACP Scheme with effect from 06-12-2012, upon completion of 10
years of regular service reckoned from 06-12-2002, being similarly
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situated to the beneficiaries of OA Nos. 1085/2018, 691/2023, 143/2024,
717/2024, 937/2024 and 1062/2025.
d) That this Hon'ble Tribunal may further be pleased to direct the
Respondents to grant and extend the aforesaid benefit of NFG of Rs.
5400/- in PB-2 to all the Applicants with effect from 06.12.2016, by
treating their entitlement to Grade Pay of Rs.4,800/- as having accrued
with effect from 06.12.2012, in parity with the similarly situated
employees and in accordance with the ratio laid down in M.
Subramaniam v. Union of India & Others, together with all
consequential benefits, including re-fixation of pay, arrears of pay and
allowances, and other consequential service benefits, as admissible
under the rules.
e) To issue a writ in the nature of mandamus or any other appropriate
writ, order, or direction, commanding the Respondents no. 03 & 09 to
release all the outstanding dues to the applicants herein without any
further delay.
f) To direct the Respondents to pay simple interest at the rate of 6%
per annum on the outstanding amount held back by the respondents
unilaterally without any valid reason from the date of due the payable
of outstanding amount until the date of actual payment.
g) That this Hon'ble Tribunal be pleased to grant such other relief, as
the applicants might be found entitled to in the facts and
circumstances of the case.
h) That this Hon'ble Tribunal be pleased to award the costs of this
Original Application in favour of the applicant, throughout.”

3. Learned counsel for the applicant submitted that the
grievance of the applicants is that despite their promotion to the
post of Inspector having been granted on regular basis w.e.f.
06.12.2002 pursuant to judicial directions and the said promotion
having been expressly protected by the Hon‟ble Supreme Court
in D. Raghu v. R. Basaveswarudu, the respondents have
arbitrarily refused to grant and/or restore the consequential
service benefits flowing therefrom. The applicants 1-3 were
granted 3rd financial upgradation under the MACP Scheme in
Grade Pay ₹4800/- w.e.f. 06.12.2012, after completing ten years
of continuous regular service. However, the respondents have
withheld these benefits contrary to binding judicial
pronouncements and despite this Tribunal having already
granted identical relief to similarly situated employees in O.A.
No. 717/2024 and connected matters. The applicants are thus
aggrieved by the denial of MACP and NFSG benefits,
discriminatory treatment vis-à-vis similarly placed officers and
the arbitrary refusal to extend consequential financial and service
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benefits, which has compelled them to file the present Original
Application seeking enforcement of their lawful entitlements.
4. The submissions of the learned counsel for the applicants
in support of his case are as under:-
4.1 The applicants were initially appointed as Lower Division
Clerks and thereafter promoted to the post of Upper Division
Clerk, which was the feeder cadre for promotion to the post of
Inspector under the Central Excise and Land Customs
Department Group „C‟ Posts Recruitment Rules, 1979.
4.2 During Cadre Restructuring–2001, large-scale promotions
were made to the post of Superintendent, resulting in substantial
vacancies in the cadre of Inspector prior to 07.12.2002. Litigation
ensued regarding the manner in which such resultant vacancies
were to be filled, culminating in the judgment of the Andhra
Pradesh High Court in WP No. 7963/2004, wherein it was
directed that vacancies which arose prior to 07.12.2002 be filled
in accordance with the 1979 Rules.
4.3 The Ministry of Finance accepted the said judgment,
issued implementation instructions and called for vacancy
position from all Cadre Controlling Authorities. Pursuant thereto,
Review DPCs were convened and the applicants were promoted
to the post of Inspector on regular basis w.e.f. 06.12.2002
against regular vacancies.
4.4 The promotion orders specifically recorded that the
promotions were made against regular vacancies and were
subject only to the final outcome of pending proceedings before
the Hon‟ble Supreme Court. Their pay was fixed under FR
22(1)(a)(i) in the applicable pay scale by treating them as
regularly promoted from 06.12.2002, thereby recognizing
continuous regular service from that date.
4.5 The challenge to the High Court judgment ultimately
culminated in the decision of the Apex Court in D. Raghu v. R.
Basaveswarudu. While the Apex Court did not affirm the
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reasoning of the High Court, it categorically protected the
promotions already granted in respect of vacancies that arose
prior to 07.12.2002 and had been filled pursuant to the High
Court judgment. In paragraph 119(22), the Apex Court
specifically declined to disturb such promotions, taking into
account the long passage of time, the fact that vacancies had
already been filled and that further promotions had also been
effected on that basis. Thus, the promotions of the applicants
stood judicially protected and attained finality. After the said
judgment, the respondents continued to treat the applicants as
regular Inspectors for all purposes, including seniority, pay
fixation, and further promotional avenues.
4.6 On the strength of such regular promotion w.e.f.
06.12.2012, the applicants completed ten years of continuous
regular service in Grade Pay ₹4600/-. In terms of DoP&T O.M.
dated 19.05.2009 governing the MACP Scheme, financial
upgradation is admissible upon completion of ten years of
continuous regular service in the same Grade Pay. After due
verification of service records and consideration by the
Departmental Screening Committee, the applicants were granted
3rd financial upgradation under MACP in Grade Pay ₹4800/-
w.e.f. 06.12.2012 . The benefit was granted through formal
establishment orders issued by the competent authority and was
acted upon, pay was fixed accordingly and the applicants
continued to draw salary in the upgraded Grade Pay without any
objection from the respondents for several years.
4.7 Thereafter, upon completion of four years of regular
service in Grade Pay Rs. 4800/-, the applicants became entitled
to Non-Functional Selection Grade (NFSG) in Grade Pay Rs.
5400/- in PB-2 in accordance with settled service jurisprudence
and consistent judicial interpretation. The entitlement flows
consequentially from the valid grant of Grade Pay Rs. 4800/- and
completion of the prescribed residency period.
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4.8 The applicants‟ claim is thus not based on any fresh or
independent cause but is a natural and automatic progression of
service benefits flowing from the regular promotion.
4.9 However, relying upon subsequent clarificatory letters
dated 07.02.2018 and 14.07.2021, the respondents have sought
to deny and/or withhold the MACP benefit and consequential
NFSG by contending that the applicants‟ service cannot be
treated as “regular service” for the purposes of MACP. This
stand is wholly contrary to the express terms of the promotion
orders, the pay fixation already granted, and the judicial
protection extended by the Hon‟ble Supreme Court. The
respondents, having themselves treated the applicants as
regularly promoted from 06.12.2012 for all purposes, cannot now
take a contradictory position to the prejudice of the applicants.
4.10 Further, the very clarifications dated 07.02.2018 and
14.07.2021, on the basis of which the respondents are
attempting to deny the benefits, have already been quashed by
this Tribunal in multiple Original Applications, including O.A. No.
717/2024 and connected matters. In those cases, which involved
identically situated Inspectors promoted under the same Review
DPC and protected by the same Supreme Court judgment, this
Tribunal categorically held that the period of service reckoned
from 06.12.2002 is to be treated as regular service for the
purposes of MACP and directed restoration of Grade Pay Rs.
4800/- and consequential benefits including NFSG in Grade Pay
Rs. 5400/-. Despite the existence of such binding and coordinate
Bench decisions, the respondents have failed to extend the
same relief to the present applicants, thereby subjecting them to
hostile discrimination and unequal treatment.
4.11 The applicants have neither committed any fraud nor
misrepresented any material fact. Their promotions were granted
strictly in compliance with judicial directions and accepted by the
Government itself. The pay fixation and MACP benefits were
granted after due scrutiny by competent authorities. The
applicants have been functioning as regular Inspectors for more
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than a decade, their seniority has crystallized, and further
promotions in the cadre have been made on that basis. It is a
settled principle of service jurisprudence that long-standing
promotions, seniority, and financial benefits cannot be unsettled
after an inordinate delay, particularly when the employee is not
at fault. The respondents are stopped from withdrawing or
withholding consequential benefits after having allowed the
applicants to continue on the basis of regular promotion and
upgraded pay for several years.
4.12 The impugned action is thus arbitrary, unreasonable, and
violative of Articles 14 and 311(2) of the Constitution of India. It
has been taken without affording any opportunity of hearing and
in disregard of binding judicial precedents of the Hon‟ble
Supreme Court and this Tribunal. The applicants have acquired
a vested right and legitimate expectation that their service from
06.12.2002 would be reckoned as regular service for all
consequential purposes including MACP and NFSG. The
continued refusal of the respondents to grant and restore these
benefits, despite identical relief having been granted to similarly
situated officers, is unsustainable in law. The applicants,
therefore, have been compelled to invoke the jurisdiction of this
Tribunal seeking enforcement of their lawful and consequential
service entitlements in accordance with settled legal principles.
5. Learned counsel for the respondents advanced oral
submissions opposing the reliefs sought. It is contended that the
promotion of applicants w.e.f. 06.12.2002 , though granted
pursuant to Review DPC proceedings, was notional in nature
and subject to judicial outcomes and therefore such notional
period cannot be treated as “regular service” for the purpose of
financial upgradations under the MACP Scheme.
5.1 Further, the clarifications dated 07.02.2018 and
14.07.2021 issued by CBIC/DoP&T merely reiterate the settled
position that regular service for MACP purposes is to be
reckoned from the actual date of assumption of charge and not
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from a notional date, and thus cannot be termed arbitrary or
illegal.
5.2 The revision of seniority and consequential re-fixation of
pay were carried out in accordance with applicable rules and
administrative instructions. The respondents deny the claim for
grant of NFSG in Grade Pay Rs. 5400/-, contending that the
applicants had not completed four years of regular service in
Grade Pay Rs. 4800/-reckoned from the actual date of
assumption of charge and, therefore, were not eligible for the
said benefit and denial of the same does not suffer from any
illegality.
6. We have considered the rival submissions advanced by
learned counsel for both the parties and have perused the
pleadings on record as well as the judgments relied upon by the
learned counsel for the applicants.
7. It is not in dispute that the applicants were promoted to the
post of Inspector pursuant to the recommendations of the
Review DPC and the promotion orders specifically granted them
promotion on regular basis w.e.f. 06.12.2002 against vacancies
which had arisen prior to 07.12.2002. Their pay was fixed under
FR 22(1)(a)(i) and they were treated as regular Inspectors for all
service purposes. The only stipulation in the promotion order
was that the same would be subject to the outcome of the
proceedings pending before the Hon‟ble Supreme Court.
8. The controversy before us is whether the period of service
reckoned from 06.12.2002 , though initially granted notionally
pursuant to Review DPC proceedings, can be treated as “regular
service” for the purposes of financial upgradation under the
MACP Scheme. It is pertinent to clarify that the 3rd MACP was
granted to the applicants 1-3 w.e.f. 06.12.2012 after completion of
ten years of service in the Grade Pay of Rs. 4600/-. The
subsequent action of the respondents seeks to exclude the
notional period from reckoning regular service, thereby revising
the MACP and consequential benefits.
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9. The Apex Court in D. Raghu v. R. Basaveswarudu (supra)
has categorically protected the promotions granted against
vacancies which arose prior to 07.12.2002. Once the Apex Court
declined to disturb such promotions, the legal consequence is
that the status of the applicants as regular Inspectors from
06.12.2002 stands affirmed and cannot be reopened indirectly
through administrative actions. The respondents, having
implemented the promotion and fixed pay accordingly, cannot
now treat the same as irregular or non-est for the limited purpose
of denying MACP benefits.
10. The expression “regular service” occurring in para 9 of the
MACP Scheme has to be interpreted in contradistinction to ad
hoc, stop-gap or purely temporary service. It does not mean that
only the period after physical assumption of charge can be
counted if the promotion itself has been granted on regular basis
pursuant to due process. The notional aspect of promotion
pertains to monetary benefits, but the status conferred is that of
a regular appointment. To exclude such period altogether would
amount to negating the very promotion granted and protected
judicially.
11. The respondents‟ reliance upon clarifications dated
07.02.2018 and 14.07.2021 cannot override the binding judicial
pronouncements. It is also a matter of record that similar
clarifications have already been set aside by this Tribunal in
earlier matters involving identically situated officers.
Administrative instructions cannot defeat the effect of a judgment
of the Apex Court nor can they curtail vested service rights
accrued over a decade.
12. In so far as the grant of Non-Functional Selection Grade
(NFSG) in Grade Pay Rs. 5400/- is concerned, the short
question for determination is whether the applicants, having
completed four years of regular service in Grade Pay Rs. 4800/-
w.e.f. 06.12.2012 , are entitled to be placed in Grade Pay Rs.
5400/- w.e.f. 06.12.2016 .
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13. The issue is no longer res integra in view of the judgment
of the Madras High Court in M. Subramaniam vs. Union of India,
which stands affirmed by the Hon‟ble Supreme Court. The
principle laid down therein has been consistently followed by
various Benches of this Tribunal. At this stage, reference may
also be made to the order dated 24.05.2024 passed in O.A. No.
558/2024, wherein a Co-ordinate Bench, applying the aforesaid
binding precedent, directed grant of Grade Pay Rs. 5400/- upon
completion of four years in Grade PayRs. 4800/-. The said
decision squarely applies to the facts of the present case. The
relevant extract of the order dated 24.05.2024 is reproduced
herein below for ready reference:
“6.The short question involved in this case is that whether the
applicant, who has completed four years‟ service in the Grade
Pay of Rs. 4800/- are entitled to get the Grade Pay of Rs. 5400/-
or not?
7.Since the issue, in hand, has already attained finality up to the
Hon‟ble Supreme Court and as such there is no necessity to
give time to the respondents to file their response/Counter
Reply by keeping the O.A. pending for long. We may also
observe that the judgment passed by Hon‟ble Madras High
Court in the case of M. Subramaniam, which has been affirmed
by Hon‟ble Supreme Court is not a judgment in „personam‟ but a
judgment „in rem‟. We have also carefully perused the
judgments as annexed by the learned counsel for the applicant
in the O.A. As such, a prayer has been made that the instant
O.A. be also disposed of in the light of the directions given by
Hon‟ble Madras High Court in the case of M. Subramaniam
(supra), which has been upheld by Hon‟ble Supreme Court.
8. It is absolutely evident from the facts on record that the
applicant has got the benefit of financial upgradations after
rendering 10 years of regular service so much so that he is
absolutely eligible to be granted the benefit of Non Functional
Grade (NFG) by placing him in the Grade Pay of Rs. 5400/- due
to the fact that he has also completed four years of regular
service in the grade pay Rs. 4800/- w.e.f. from the dates as has
been already recorded in paragraph 3.2. of this judgment.
Furthermore, in the instant case, applicant is in service and
accordingly he is entitled to be granted the benefit of NFG.
9. In view of the discussions made hereinabove, O.A. deserves
to be allowed and is accordingly, allowed at the admission stage
itself. The competent authority amongst the Respondents must
ensure that the benefit of judgment passed by Hon‟ble High
Court of Madras in the case of M. Subramaniam, which has been
upheld by Hon‟ble Supreme Court, be also given to the
applicant. Accordingly, they are directed to re-fix the pay of the
applicant in the Non-Functional Grade (NFG) Pay Scale of Rs.
9300-34800 in Pay Band – II, with Grade Pay of Rs. 5400/- with all
consequential benefits, with effect from the dates that he had
completed four years of regular service in the Grade Pay of Rs.
4800/-. All the consequential benefits shall also accrue. The
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aforesaid exercise must be carried out by the respondents
within a period of five months from the date of receipt of
certified copy of this order.”

14. Similar matter also came for consideration before the
Ernakulam Bench of this Tribunal in OA No. 180/00161/2019 -
A.S Peethambaran Vs. U.O.I & Ors and the aforesaid OA was
also allowed vide order dated 21.03.2022 following the judgment
dated 06.09.2010 in WP (C) No. 13225/2010 of the Hon‟ble High
Court of Judicature at Madras in the case of M. Subramaniam
Vs. Union of India & Ors. Although the aforesaid order of the
Tribunal was challenged by the Union of India in OP (CAT) NO.
109 OF 2023 before Hon‟ High Court of Kerala, the same was
dismissed vide judgment dated 21.09.2023. Thereafter, the
Union of India filed SPECIAL LEAVE PETITION (CIVIL) Diary
No(s).12304/2024which was also dismissed on 13-05-2024.
15. Accordingly, the respondents are directed to grant applicant
Nos. 1-3 the benefit of NFSG in Grade Pay Rs. 5400/- in PB-2
w.e.f. 06.12.2016 i.e. the date of completion of four years of service
rd
after grant of 3 MACP, with all consequential benefits including re-
fixation of pay and revision of pensionary benefits, if applicable .
16. Accordingly, the impugned actions based on letters dated
07.02.2018 and 14.07.2021, in so far as they related to the
applicants, are set aside. The respondent are directed to restore
rd
the 3 MACP granted to the applicants w.e.f. 06.12.2012 and
grant him the benefit of NFSG in the Grade Pay of Rs. 5400/-
w.e.f. 06.12.2016 with all consequential benefits including re-
fixation of pay and revision of pensionary benefits.
17. The aforesaid exercise shall be completed within a period of
four months from the date of receipt of a certified copy of this order.
18. In so far as the claim of interest at the rate of 6% per annum
is concerned, we are of the view that though the applicants are
entitled to consequential monetary benefits, the claim of interest is
not warranted in the facts and circumstances of the case. However,
if the respondents fail to comply with the directions within the
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stipulated period, the outstanding dues shall carry simple interest
@ 6% per annum from the date of expiry of the compliance period
till actual payment.
19. The Original Application stands allowed in the above terms.
No orders as to cost.

20 . All pending M.As, if any, shall be treated as disposed of.

(Anjani Nandan Sharan) (Justice Rajiv Joshi)
Member (A) Member (J)

RKM/
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