2005 (7) TMI 401 - AT - Central Excise

Summary

Issues:
1. Correct payment of duty by 100% EOU manufacturing Leather Finishing Chemicals.
2. Interpretation of Board's Circular on payment of customs duty.
3. Judicial discipline in following Larger Bench judgments.

Analysis:
1. The appeal dealt with the payment of duty by a 100% Export Oriented Unit (EOU) manufacturing Leather Finishing Chemicals. The appellant, registered with the Visakhapatnam Export Processing Zone, cleared goods into the Domestic Tariff Area (DTA) and paid duty at a concessional rate of 50% of customs duties as per a specific Board's Circular. A Show Cause Notice alleged incorrect duty payment due to the rescission of the Circular, demanding payment of 50% of credit of customs duties. The appellant argued they had correctly paid duty, citing Tribunal judgments supporting their method.

2. The Tribunal referred to a Larger Bench judgment in the case of Indoworth India Ltd. v. CCE, Nagpur, which upheld duty calculation under a specific Circular applicable post a certain date. This ruling overruled a previous judgment in the case of Uniworth Textiles Ltd. v. CCE. The appellant contended that the Commissioner had not followed the Larger Bench judgment and the Circular, indicating judicial indiscipline. The Tribunal found the issue covered by the Larger Bench judgment, emphasizing that the Commissioner was bound by it. The failure to follow the Larger Bench decision was deemed a case of judicial indiscipline.

3. The Tribunal concluded that the Commissioner should have adhered to the Larger Bench judgment and cautioned against not following it. The appeal was allowed in favor of the appellant, with any consequential relief granted. The judgment highlighted the importance of judicial discipline in applying precedents and Larger Bench decisions, ensuring consistency and adherence to established legal principles.