COMMISSIONER OF CENTRAL EXCISE versus M/S. ESWARAN AND SONS ENGINEERS LTD.

Citation: [2005] 1 S.C.R. 108 · Decided: 05-01-2005 · Supreme Court of India · Bench: S.N. VARIAVA · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
B 
c 
COMMISSIONER OF CENTRAL EXCISE 
v. 
MIS. ESWARAN AND SONS ENGINEERS LTD. 
JANUARY 5, 2005 
(S.N. VARIA VA, DR. AR. LAKSHMANAN AND S.H. KAPADIA, JJ.] 
Central Excise Tariff Act, 19135; Section 37B and Proviso (a) and (b)I 
Tariff sub-heading 8535 and 8537 and Circular dated 14.7.1994: 
Classification-Minimum Oil Circuit Breakers-levy of excise duty-
Assessee classifoing the product under tariff sub-heading 8535-/ssuance of 
Circular by the Board clarifoing that the product falls under the sub-heading 
8537 prospectively-Applicability of the Circular-Held: Though Circulars 
being issued by the Board for maintaining uniformity in the classification of 
C excisable goods, Circulars could not restrict the Authorities to exercise their 
discretionary power in the specified manner-Since assessing authority had 
taken a prima facie view by reclassifoing the product under sub-heading 
8537 before issuance of the Circular, the Circular has no application to the 
facts and circumstances of the case. 
E 
Assessee-manufacturer of Minimum Oil Circuit Breakers, calculated 
excise duty by showing classification of the product under tariff sub-
heading 8535 of the Central Excise Tariff Act. Assessing Authorities issued 
show cause notices to the assessee proposing to revise the classification 
from sub-heading 8535 to sub-heading 8537 of the Act, and came to the 
F finding that the product was classifiable under the sub-heading 8537, and 
accordingly ordered the assessee to pay differential amount of duty. On 
appeal, the appellate authority took note of a Circular dated 14.7.94 issued 
by the CBEC/Board clarifying that the product in question would fall 
under the sub-heading 8537 and accordingly ordered re-classification of 
the product prospectively and to that extent alone raised demand of 
G differential amount of excise duty. The order was affirmed by the Tribunal 
(CEGAT). Hence the present appeals. 
H 
Revenue contended that since show cause notices were issued by the 
assessing authorities prior to issuance of the Circular, the Tribunal erred 
108 
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C.C.E. v. ESWARAN & SONS ENGINEERS LTD. [KAPADIA, J.] 109 
in restricting the demand raised by them. 
Allowine the appeals, the Court 
HELD: Under Section 378 of the Central Excise Tariff Act, the 
Board is empowered to issue instructions to Central Excise Officers, for 
A 
the purpose of maintaining uniformity in the classification of excisable B 
goods, which are required to be followed by such officers. However, under 
proviso (a) to Section 378 of the Act an exception is made that the 
instructions, orders or directions cannot make any Central Excise Officer 
to dispose of a particular case in a particular manner. Similarly, under 
proviso (b) such instructions shall not bind the discretion of Commissioner C 
of Central Excise (Appeals), discharging appellate functions. In view of 
the proviso to Section 378 as also in the present case, the Assistant 
Collector had taken a prima facie view for purposes of reclassification as 
far back as 17.12.1993. Therefore, the Circular which was issued by the 
Board on 14.7.1994 had no application to the facts of the present case. 
Hence, the impugned judgment of the Tribunal is set aside. 
D 
[113-D-E; 114-DJ 
Bir/a Jute And Industries Ltd v. Assistant Collector of Central Excise, 
(1992) 57 ELT 674, approved. 
H.M Bags Manufacturer v. Collector of Central Excise, (1997) 94 ELT E 
3, held inapplicable. 
CIVIL APPELLATE JURJSD!CTION : Civil Appeal Nos. 5403-5406 
of 1999. 
From the Judgment and Order dated 26.9.1999 of the Central Excise p 
Customs and Gold (Control) Appellate Tribunal, South Zonal Bench at Madras 
in A.No. E./689-692/95 in F.O. No. 864-867 of 1999. 
A. Subba Rao and B. Krishn Prasad for the Appellant. 
The Judgment of the Court was delivered by 
G 
KAPADIA, J. These appeals under section 35L of Central Excise Act, 
1944, (hereinafter referred to for the sake of brevity as "the said 1944 Act") 
are filed by the Department seeking to challenge the order dated 26.4.1999 
passed by the Customs Excise and Gold (Control) Appellate Tribunal (for 
short 'the tribunal') in appeal No. E/689-692 of 1995. 
H 
110 
SUPREME COURT REPORTS 
[2005] I S.C.R. 
A 
The facts giving rise to these civil appeals, briefly stated, are as follows: 
On 17th December, 1993 Mis. Eswaran and Sons Engineers Limited 
(hereafter referred to as 'the assessee') was engaged in the manufacture of 
Minimum Oil Circuit Breakers. The assessee pai

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