1996 (4) TMI 127 - HC - Central Excise

Summary

Issues Involved:
Challenge to circular/order issued u/s 37B of the Central Excises and Salt Act, 1944 by the Central Board of Excise and Customs.

Judgment Summary:

Issue 1: Validity of Circular

The petitioners challenged the circular issued by the Central Board of Excise and Customs under Section 37B of the Act, which directed that the addition of chemicals to pesticidal chemicals in highly concentrated form amounts to "manufacture." The petitioners contended that the process of diluting pesticides does not result in a new product with different properties. The Tribunal had previously held that such processing does not amount to 'manufacture.' The Court was not deciding whether the process amounted to 'manufacture' but the validity of the circular in light of the Tribunal's decision.

Issue 2: Authority of Central Board

Section 37B of the Act empowers the Board to issue orders for uniformity in the classification of excisable goods or levy of excise duties. However, the Board cannot issue directions contrary to the Tribunal's decision. The Court held that once a decision becomes final, the Board cannot render it nugatory by issuing circulars. The circular in question was quashed and set aside.

In conclusion, the Court quashed the circular issued by the Central Board of Excise and Customs and ruled in favor of the petitioners.