1999 (11) TMI 79 - HC - Central Excise

Summary

Issues Involved:
1. Validity of Circular No. 47/1/97-CX dated 3-3-1997.
2. Jurisdiction of the Central Board of Excise and Customs (CBEC) u/s 37B of the Central Excise Act, 1944.
3. Binding nature of judicial pronouncements on administrative authorities.

Summary:

1. Validity of Circular No. 47/1/97-CX dated 3-3-1997:
The petitioner sought a writ to declare the impugned Circular No. 47/1/97-CX, dated 3-3-1997, as ultra vires of Section 37B of the Central Excise Act, 1944, and Articles 14, 19(1)(g), and 265 of the Constitution of India. The circular directed that Di-Calcium Phosphate (DCP) of animal feed grade be classified under sub-heading 2835.00, attracting 16% duty, contrary to previous judicial decisions that classified it under sub-heading 2302.00, attracting nil duty.

2. Jurisdiction of the CBEC u/s 37B of the Central Excise Act, 1944:
The court held that the CBEC, empowered to issue circulars u/s 37B, cannot nullify the effect of judicial decisions. Section 37B allows the CBEC to issue instructions for uniformity in classification but does not authorize it to overrule judicial pronouncements. The court cited the Gujarat High Court's decision in Indichem v. Union of India, which held that circulars contrary to judicial decisions are not valid.

3. Binding nature of judicial pronouncements on administrative authorities:
The court emphasized that once a judicial decision becomes final, administrative authorities cannot issue circulars to nullify it. The court referenced the Supreme Court's stance that administrative tribunals cannot ignore the law declared by the highest court in the state. The court also noted that the Gujarat High Court had already quashed the impugned circular, and such decisions are binding throughout the country unless contradicted by another High Court.

Conclusion:
The court quashed the impugned circular, holding it was issued in excess of jurisdiction and contrary to judicial pronouncements. The writ petition was allowed without costs.