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2013 (3) TMI 283 - HC - Central ExciseDuty demand on circuit breakers with control panels - whether the Revenue is entitled to make demand under Section 11A of the Central Excise Act retrospectively for a period prior to the date of the classification made in respect of a particular item under Section 37B of the Act? - Held that - As decided H.M. Bags Manufacturer Vs. Collector of Central Excise 1997 (7) TMI 119 - SUPREME COURT OF INDIA in a demand under Section 11A of the Act cannot be raised for any date prior to the date of the Board circular and the time limit as provided under Section 11A of the Act is not available to the Department. Thus it is manifestly clear from the above decision rendered that once reclassification Notification is issued, the Revenue cannot invoke Section 11A of the Act to make demand for a period prior to the date of said classification notification also. The reasoning assigned for not following the judgment of the Supreme Court is not acceptable in view of the fact that merely because the assessee has not challenged the earlier order of the Tribunal or the Commissioner, the same cannot be taken as a precedent when already, on the very same issue, the Honourable Supreme Court decided in favour of the assessee. Therefore, the Tribunal is bound to follow the decision of the Honourable Supreme Court in preference to the decision of the Tribunal, though such decision has become final, in so far as the assessee is concerned - in favour of the assessee.
Issues:
1. Interpretation of duty demand on circuit breakers with control panels prior to CBEC Circular dated 14.07.1994. 2. Applicability of CBEC Circular dated 14.07.1994 prospectively. 3. Entitlement to make demand under Section 11A of the Central Excise Act retrospectively. 4. Consideration of earlier decisions by Commissioner and Tribunal in confirming duty demand. Analysis: Issue 1: The appeal raised substantial questions of law regarding the duty demand on circuit breakers with control panels prior to the issuance of the CBEC Circular dated 14.07.1994. The assessee contended that the duty demand was not sustainable under the said circular. Issue 2: The Tribunal held that the CBEC Circular dated 14.07.1994 is applicable prospectively from the date of its publication, as per the judgment of the Supreme Court in H.M. Bags Manufacturing Co. case. The Commissioner confirmed the duty demand for a specific period based on this circular. Issue 3: The main contention revolved around the entitlement of the Revenue to make a demand under Section 11A of the Central Excise Act retrospectively. The Supreme Court's decision in H.M. Bags Manufacturer case clarified that a demand cannot be raised for any date prior to the date of the Board circular, rendering Section 11A inapplicable retrospectively. Issue 4: The Tribunal's decision was challenged based on the earlier orders by the Commissioner and Tribunal confirming the duty demand for a specific period. The Tribunal was criticized for not considering the Supreme Court's decision, which should have been followed over the Tribunal's decision, even if the earlier orders had become final. In conclusion, the High Court allowed the appeal in favor of the assessee, emphasizing the importance of following the Supreme Court's decision regarding duty demands and classification issues. The Tribunal's decision was overturned, highlighting that the Revenue cannot invoke Section 11A retrospectively for demands prior to the date of the classification circular.
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