Revised Pay Scales Must Be Granted Notionally from Date of Pay Commission Implementation to Ensure Parity

The 21 applicants are retired Inspectors and Superintendents of the Customs & Central Excise Department.

Following the 5th Central Pay Commission, revised pay scales of Rs. 6,500–10,500 (Inspectors) and Rs. 7,500–12,000 (Superintendents) were implemented via Office Memorandums dated 21.04.2004 and 11.05.2004, but were made effective only from 21.04.2004.

The applicants sought retrospective notional fixation from 01.01.1996 (the effective date of the 5th CPC) to achieve parity with similarly situated employees in the Income Tax Department (CBDT) and based on favorable rulings from other CAT Benches.

The 4th respondent rejected their claim via a speaking order dated 12.08.2025, which is challenged herein.

1. Whether the applicants are entitled to notional fixation of the upgraded pay scales with effect from 01.01.1996 instead of 21.04.2004 on the grounds of parity and fairness.

2. Whether the claim is barred by limitation and the doctrine of "fence-sitters" due to the delay in approaching the Tribunal.

The Tribunal applied the principle of "Equal Pay for Equal Work" and non-discrimination under Article 14 of the Constitution of India, emphasizing that similarly situated employees under the same Department of Revenue (CBDT and CBIC) must be treated equally.

It relied on State of Karnataka v. C. Lalitha, which mandates that service benefits granted to one set of employees should be extended to all similarly placed persons.

On the issue of limitation, it followed Inder Pal Yadav v. Union of India and Delhi High Court precedents holding that pay fixation/pension constitutes a recurring cause of action, and "fence-sitters" should not be penalized where the judgment is "in rem".

The Tribunal reasoned that since a Special Anomaly Committee (constituted per Kolkata High Court orders) had already recommended retrospective notional fixation from 01.01.1996 for CBDT employees, the same benefit cannot be denied to CBIC employees as both boards function under the Ministry of Finance.

The Court rejected the respondents' plea of limitation, noting that several Benches (Hyderabad, Mumbai, Kolkata, etc.) had already settled this issue and the Department had implemented those orders for over 1,500 other employees.

The Tribunal characterized the prior judicial pronouncements as "judgments in rem," making it obligatory for the government, as a model employer, to extend the benefits to the applicants without forcing individual litigation.

The respondents were directed to re-fix the applicants' pay and pensionary benefits accordingly within two months.