Commissioner of Central Excise, Bolpur Vs. M/s. Ratan Melting & Wire Industries, Calcutta
EmailAppeal: Civil Appeal No. 4022 of 1999
(From the Judgment and Order dated 22.1.99 of the Central Excise, Customs and Gold (Control) Appellate Tribunal, New Delhi in F.O. No. E/72/99-B1 in A. No. E/4327 of 1989-B1)
(From the Judgment and Order dated 22.1.99 of the Central Excise, Customs and Gold (Control) Appellate Tribunal, New Delhi in F.O. No. E/72/99-B1 in A. No. E/4327 of 1989-B1)
Petitioner: Commissioner of Central Excise, Bolpur
Respondent: M/s. Ratan Melting & Wire Industries, Calcutta
Apeal: Civil Appeal No. 4022 of 1999
(From the Judgment and Order dated 22.1.99 of the Central Excise, Customs and Gold (Control) Appellate Tribunal, New Delhi in F.O. No. E/72/99-B1 in A. No. E/4327 of 1989-B1)
(From the Judgment and Order dated 22.1.99 of the Central Excise, Customs and Gold (Control) Appellate Tribunal, New Delhi in F.O. No. E/72/99-B1 in A. No. E/4327 of 1989-B1)
Judges: RUMA PAL, ARIJIT PASAYAT & C.K. THAKKER, JJ.
Date of Judgment: Feb 23, 2005
Appearances:
Mr. K.P. Pathak, Additional Solicitor General, Mr. K.Swami and Mr. B. Krishna Prasad, Advocates with him for the Appellant.
Ms. Praveena Gautam, Advocate for Mr. Pramod B. Agarwala, Advocate for the Respondent.
Ms. Praveena Gautam, Advocate for Mr. Pramod B. Agarwala, Advocate for the Respondent.
Head Note:
EXCISE
Exemption notifications – Interpretation of – Law declared by the Supreme Court being binding on the Revenue Department, once a position of law is clarified by the Court, contrary view expressed by the Central Board of Excise and Customs on their circulars should per force lose their validity and become non est. (Paras 3 and 4)
Exemption notifications – Interpretation of – Law declared by the Supreme Court being binding on the Revenue Department, once a position of law is clarified by the Court, contrary view expressed by the Central Board of Excise and Customs on their circulars should per force lose their validity and become non est. (Paras 3 and 4)
Cases Reffered:
1. Kalyani Packaging Industry v. Union of India and Anr. (2004 (168) ELT 145) (Para 2)
2. CCE v. Maruti Foam Pvt. Ltd. (2004 (164) ELT 394) (Para 3)
3. Commissioner of Customs, Calcutta and Ors. v. Indian Oil Corpn. Ltd. and Another (2004 (165) ELT 257) (Para 3)
4. Collector of Central Excise, Vadodra v. Dhiren Chemical Industries (JT 2001 (10) SC 456) (Para 1)
5. Central Excise, Patna v. Usha Martin Industries (JT 1997 (7) SC 557) (Para 1)
2. CCE v. Maruti Foam Pvt. Ltd. (2004 (164) ELT 394) (Para 3)
3. Commissioner of Customs, Calcutta and Ors. v. Indian Oil Corpn. Ltd. and Another (2004 (165) ELT 257) (Para 3)
4. Collector of Central Excise, Vadodra v. Dhiren Chemical Industries (JT 2001 (10) SC 456) (Para 1)
5. Central Excise, Patna v. Usha Martin Industries (JT 1997 (7) SC 557) (Para 1)
JUDGEMENT:
O R D E R
ARIJIT PASAYAT, J.
1. During hearing of this appeal it was fairly conceded by learned counsel for the parties that the decision of this Court in Collector of Central Excise, Patna v. Usha Martin Industries1 on which CEGAT placed reliance was overruled by a subsequent decision of a Constitution Bench in Collector of Central Excise, Vadodra v. Dhiren Chemical Industries2. But learned counsel for the respondent submitted that paragraph 11 of Dhiren Chemical’s case (supra) operates in its favour. It reads as follows:
“We need to make it clear that, regardless of the interpretation that we have placed on the said phrase, if there are circulars which have been issued by the Central Board of Excise and Customs which place a different interpretation upon the said phrase, that interpretation will be binding upon the Revenue.”
2. Subsequently, the effect of this observation was noted in several decisions. In Kalyani Packaging Industry v. Union of India and Anr.3 it was noted as follows:
“We have noticed that para 9 of Dhiren Chemical case (JT 2001 (10) SC 456) is being misunderstood. It, therefore, becomes necessary to clarify para 9 of Dhiren Chemical case (JT 2001 (10) SC 456). One of us (Variava, J.) was a party to the judgment of Dhiren Chemical case and knows what was the intention in incorporating para 9. It must be remembered that law laid down by this Court is law of the land. The law so laid down is binding on all courts/tribunals and bodies. It is clear that circulars of the Board cannot prevail over the law laid down by this Court. However, it was pointed out that during hearing of Dhiren Chemical case because of the circulars of the Board in many cases the Department had granted benefits of exemption notifications. It was submitted that on the interpretation now given by this Court in Dhiren Chemical case the Revenue was likely to reopen cases. Thus para 9 was incorporated to ensure that in cases where benefits of exemption notification had already been granted, the Revenue would remain bound. The purpose was to see that such cases were not reopened. However, this did not mean that even in cases where the Revenue/Department had already contended that the benefit of an exemption notification was not available, and the matter was sub judice before a court or a tribunal, the court or tribunal would also give effect to circulars of the Board in preference to a decision of the Constitution Bench of this Court. Where as a result of dispute the matter is sub judice, a court/tribunal is, after Dhiren Chemical case, bound to interpret as set out in that judgment. To hold otherwise and to interpret in the manner suggested would mean that courts/tribunals have to ignore a judgment of this Court and follow circulars of the Board. That was not what was meant by para 9 of Dhiren Chemical case.”
3. A disparate view has been taken in CCE v. Maruti Foam Pvt. Ltd.1 and Commissioner of Customs, Calcutta and Ors. v. Indian Oil Corpn. Ltd. and Another2. It appears to us that the law declared by this Court is binding on the Revenue/Department and once the position in law is declared by this Court, the contrary view expressed in the circular should per force lose its validity and become non est.
4. Though the view expressed in Kalyani’s case (supra), and our view about invalidation might clarify the observations in para 11 of Dhiren Chemical’s case (supra), we feel that the earlier judgment in Dhiren Chemical’s case (supra),) being given by a Bench of five Judges, it would be appropriate for a bench of similar strength to clarify the position. In the circumstances, we refer the matter to a larger bench of five Hon’ble Judges. Let the papers be placed before Hon’ble the Chief Justice of India for constituting an appropriate Bench.
ARIJIT PASAYAT, J.
1. During hearing of this appeal it was fairly conceded by learned counsel for the parties that the decision of this Court in Collector of Central Excise, Patna v. Usha Martin Industries1 on which CEGAT placed reliance was overruled by a subsequent decision of a Constitution Bench in Collector of Central Excise, Vadodra v. Dhiren Chemical Industries2. But learned counsel for the respondent submitted that paragraph 11 of Dhiren Chemical’s case (supra) operates in its favour. It reads as follows:
“We need to make it clear that, regardless of the interpretation that we have placed on the said phrase, if there are circulars which have been issued by the Central Board of Excise and Customs which place a different interpretation upon the said phrase, that interpretation will be binding upon the Revenue.”
2. Subsequently, the effect of this observation was noted in several decisions. In Kalyani Packaging Industry v. Union of India and Anr.3 it was noted as follows:
“We have noticed that para 9 of Dhiren Chemical case (JT 2001 (10) SC 456) is being misunderstood. It, therefore, becomes necessary to clarify para 9 of Dhiren Chemical case (JT 2001 (10) SC 456). One of us (Variava, J.) was a party to the judgment of Dhiren Chemical case and knows what was the intention in incorporating para 9. It must be remembered that law laid down by this Court is law of the land. The law so laid down is binding on all courts/tribunals and bodies. It is clear that circulars of the Board cannot prevail over the law laid down by this Court. However, it was pointed out that during hearing of Dhiren Chemical case because of the circulars of the Board in many cases the Department had granted benefits of exemption notifications. It was submitted that on the interpretation now given by this Court in Dhiren Chemical case the Revenue was likely to reopen cases. Thus para 9 was incorporated to ensure that in cases where benefits of exemption notification had already been granted, the Revenue would remain bound. The purpose was to see that such cases were not reopened. However, this did not mean that even in cases where the Revenue/Department had already contended that the benefit of an exemption notification was not available, and the matter was sub judice before a court or a tribunal, the court or tribunal would also give effect to circulars of the Board in preference to a decision of the Constitution Bench of this Court. Where as a result of dispute the matter is sub judice, a court/tribunal is, after Dhiren Chemical case, bound to interpret as set out in that judgment. To hold otherwise and to interpret in the manner suggested would mean that courts/tribunals have to ignore a judgment of this Court and follow circulars of the Board. That was not what was meant by para 9 of Dhiren Chemical case.”
3. A disparate view has been taken in CCE v. Maruti Foam Pvt. Ltd.1 and Commissioner of Customs, Calcutta and Ors. v. Indian Oil Corpn. Ltd. and Another2. It appears to us that the law declared by this Court is binding on the Revenue/Department and once the position in law is declared by this Court, the contrary view expressed in the circular should per force lose its validity and become non est.
4. Though the view expressed in Kalyani’s case (supra), and our view about invalidation might clarify the observations in para 11 of Dhiren Chemical’s case (supra), we feel that the earlier judgment in Dhiren Chemical’s case (supra),) being given by a Bench of five Judges, it would be appropriate for a bench of similar strength to clarify the position. In the circumstances, we refer the matter to a larger bench of five Hon’ble Judges. Let the papers be placed before Hon’ble the Chief Justice of India for constituting an appropriate Bench.
