2004 (5) TMI 78 - SC - Central Excise

On misunderstanding of Dhiren Chemical s case - it was pointed out that during hearing of Dhiren Chemical s case that because of circulars of the Board in many cases the Department had granted benefits of exemption Notifications. To prevent the department to reopen cases.the Para 9 was incorporated to ensure that cases where benefits has been granted, cases should not be reopened. Otherwise Courts/Tribunals can not ignore a judgment of this Court and follow circulars of the Board.

Summary

Issues:
Interpretation of circulars not relied upon before lower authorities/Court; Clarification on benefit of exemption Notification when duty has not been paid; Misunderstanding of Para 9 of Dhiren Chemical's case regarding the binding nature of circulars issued by the Central Board of Excise and Customs.

Analysis:
The judgment addresses the issue of parties relying on circulars not presented before lower authorities or the Court. It emphasizes that such material cannot be permitted for the first time in a higher court. In this case, reliance was solely on a Circular of 1995, which was deemed irrelevant for the concerned period of August 1990 to January 1991.

Regarding the benefit of an exemption Notification, the judgment refers to a previous case where it was clarified that the benefit is only applicable if duty has actually been paid at the correct rate. If the raw material is not subject to excise duty or is at a "nil" rate, then no duty is considered paid, and the exemption does not apply.

The judgment delves into the misunderstanding of Para 9 of a previous case, Dhiren Chemical's case. It clarifies that circulars issued by the Board cannot supersede the law established by the Court. The purpose of Para 9 was to prevent reopening cases where benefits of exemption had already been granted. However, it does not imply that circulars should override Court decisions in ongoing disputes.

In conclusion, the judgment finds no fault in the impugned decision, as even the benefit of a Circular was not applicable in this case. It upholds the interpretation provided in Dhiren Chemical's case and dismisses the Special Leave Petition accordingly.