COMMISSIONER OF CENTRAL EXCISE versus M/S. RATAN MELTING AND WIRE INDUSTRIES, CALCUTTA

Citation: [2005] 2 S.C.R. 329 · Decided: 23-02-2005 · Supreme Court of India · Bench: RUMA PAL · Disposal: Matter referred to larger bench
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Judgment (excerpt)

COMMISSIONER OF CENTRAL EXCISE 
A 
v. 
MIS. RA TAN MEL TING AND WIRE INDUSTRIES, CALCUTTA 
FEBRUARY 23, 2005 
[RUMA PAL, ARIJIT PASAYAT AND C.K. THAKKER, JJ.] 
B 
Excise Law: 
Central Board of Excise and Customs-Circulars issued by-Placing 
interpretation of a statutory provision different than the Supreme Court- C 
Observation in Dhiren Chemical Industries' case-Clarification of-Matter 
referred to f1Ve Judge Bench-Constitution of India-Article 141. 
Collector of Central Excise, Vadodara v. Dhiren Chemical Industries, 
(2002) 2 SCC 127 and Kalyani Packaging Industry v. Union of India and D 
Anr., [2004] 6 SCC 719, referred to. 
Collector of Central Excise, Patna v. Usha Martin Industries, [1997] 7 
SCC 47, overruled in Dhiren Chemical Industries. 
CCE v. Maruti Foam Pvt. Ltd, {2004] 6 SCC 722 and Commissioner E 
of Customs, Calcutta and Ors. v. Indian Oil Corpn. Ltd. and Anr., (2004] 3 
sec 488, cited. 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4022 ot 1999. 
From the Judgment and Order dated 22.1.99 of the Central Excise, 
Customs and Gold (Control Appellate Tribunal, New Delhi in F.O. No. E/72/ F 
99-Bl in A. No. E/4327 of 1989-Bl. 
K.P. Pathak, Additional Solicitor General, K. Swami and B. Krishna 
Prasad for the Appellant. 
Ms. Praveena Gautam for Pramod and B. Agarwala for the Respondent. G 
The following Order of the Court was delivere,d' : 
ARIJIT PASAYAT, J. During hearing of this appeal it was fairly 
329 
H 
330 
SUPREME COURT REPORTS 
[2005) 2 S.C.R. 
A conceded by learned counsel for the parties that the decision of this Court in 
Collector of Central Excise, Patna v. Usha' Martin Industries, [1997] 7 SCC 
47) on which CEGAT placed reliance was over-ruled by a subsequent decision 
of a Constitution Bench in Collector of Central Excise, Vadodra v. Dhiren 
Chemical Industries, [2002] 2 SCC 127. But learned counsel for the respondent 
B submitted that paragraph I I of Dhiren Chemical's case (supra) operates in its 
favour. It reads as follows: 
· 
· 
c 
D 
E 
F 
G 
H 
"We need to make it clear that, regardless of the interpretation 
that we have placed on the said phrase, if there are circulars which 
have been issued by the Central Board of Excise and Customs which 
place a different interpr~ti~ior(upon the said phrase, that interpretation 
will be binding upon the Revenue." 
Subsequently,· the effect of this observation was noted in several 
decisions. In Kalyani Packaging Industry v. Union of India and Anr., [2004] 
6 sec 719 it was noted as follows : 
"We have noticed that para 9 (para 11 in SCC) of Dhireri Chemical 
case [2004] 6 SCC 722 is being misunderstood. It, therefore, becomes 
necessary to clarify para 9 (para 11 in SCC) of Dhiren Chemical case 
[2004] 6 SCC 722. One of us (Variava, J.) was a party to the judgment 
of Dhiren Chemical case an.d knows what was the intention in 
incorporating para' 9 (para 11 in SCC). It must be remembered that 
law law laid down by this Court is law of the land. The law so laid 
down is binding on all courts/tribunals and ~odies. It is clear that 
circulars of the Board cannot prevail over the law laid down by this 
Court. However, it was pointed out that during hearing of Dhiren 
Chemical case because of the circulars of the Board in many cases 
the Department, had granted benefits of exemption notifications. It 
was submitted that on the interpretation now given by this Court in 
Dhiren Chemical case the Revenue was likely to reopen cases. Thus 
para 9 (para 11 in . SCC) was incorporated to ensure that in cases 
where benefits of exemption notification had already been granted, 
the Revenue would remain bound. The purpose was to see that such 
cases were not reopened. However, this did not mean that even in 
cases where the Revenue/Department had already contended that the 
benefit of an exemption notification was not available, and the matter 
was sub ju dice before a court or a tribunal, the court or. tribunal 
would also give effect to circulars of the Board in preference to a 
decision of the Constitution Bench of this Court. Where as a result 
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C.C.E. v.RATAN MEL TING AND WIRE INDUSTRIES [PASA Y AT, J.] 
331 
of dispute the matter is sub judice, a court/tribunal is, after Dhiren A 
Chemical case, bound to interpret as set out in that judgment. To 
hold otherwise and to interpret in the manner suggested would mean 
that courts/tribunals have to ignore a judgment of this Court and 
follow circulars of the Board. That was not what was meant by para 
9
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