LexM/S. JAI FIBRES LTD. versus COMMISSIONER OF CENTRAL EXCISE, MUMBAI-III
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·- ·~ " A MIS. JAI FIBRES LTD. v. COMMISSIONER OF CENTRAL EXCISE, MUMBAI-III NOVEMBER 15, 2007 B [S.B. SINHA AND DALVEER BHANDARI, JJ.) Central Excises and Salt Act, 1944-ss.37B and I IA-Different High Courts had been taking different views with regard to appropriate c classification of HDPE bags under the Tariff Act-Circular issued by CBEC u/s. 3 7 B for ensuring uniformity-Use of word "henceforth" in the circular-Held: Circular was expressly directed to have prospective application-Differential duty could not be recovered on basis of said circular for period prior to date of its publication-Central Excise D Tar!IJ Act, 1985-Chapter Heading Nos. 39 and 63. ' • Different High Courts had been taking different views as to whether excise duty in respect ofHDPE bags was payable under Ch?pter Heading 63 or Chapter Heading 39 of the Central Excise E Tariff Act, 1985. The Madhya Pradesh High Court in the Raj Pack Well Ltd. case* held that HDPE bags should be classified under Chapter Heading 39 and not Chapter Heading 63. While appeal against the aforesaid decision of the said High Court was pending before this Court, the Central Board of Excise and Customs in order F to bring about an uniformity in classification, issued a circular dated 24-09-1992 in exercise of powers conferred under Section 37-B of the Central Excises and Salt Act, 1944, in terms of which HDPE strips and tapes of width not exceeding 5 mm were to be "henceforth" classified under sub-heading 3920.32 and sacks made therefrom G under sub-heading 3923.90 of the Tariff. The circular was published on 15-10-1992. Appellant-assessee classified HDPE bags manufactured by it \ ~ under Chapter63 of the Tariff Act forthe period 1-4-1992to15-10- 1992. Relying on the said circular, Respondents issued a show cause H 82 f M/S.JAIFIBRESLTD. v. COMMISSIONER OF CENTRAL 83 EXCISE, MUMBAI-III '; notice upon the Appellants to pay differential duty under Chapter A 39 for the period 1-4-1992 to 15-10-1992. The cause having been shown, the Assistant Commissioner dropped the proceedings. Appeal filed by Revenue before the Commissioner was dismissed. Revenue filed appeal before the Tribunal. Tribunal relying upon a three-Judge Bench decision of this Court in /TW Signode case** held that in view B of the amendment of Section llA of the Central Excise Act, the validity whereof had been upheld, the Revenue was within its jurisdiction to get the differential duty which had not been recovered. In appeal to this Court, Appellant submitted that the Tribunal c failed to take into consideration a decision of this Court in HM Eags Manufacturer***, in its correct perspective, wherein it was b.eld that the word "henceforth" used by the Board must lead to the conclusion that only prospective effect thereto could be given and not a retrospective effect. D Allowing the appeal, the Court ~ HELD: 1.1. Section llA of the Central Excise Act was amended having regard to the Constitution Bench decision of this Court in Cotspun Limited Amendment of Section llA was found in /TW Signode as a validating legislation, retrospective operation whereof, E therefore, was held to be permissible. [Para 11) [87-H; 88-A) 1.2. However, this Court is concerned with a different situation herein. Whereas there cannot be any doubt that the Revenue is entitled to rectify a mistake but implementation thereof would depend F , upon the statutory provisions. Section 37B of the Central Excise Act ' confers powers upon the Central Board of Excise and Customs to issue such orders, instructions and directions as the Central Excise Officers may deem fit, if it considers necessary or expedient to do so for the purpose of uniformity of classification of goods in a case G or with levies of duty of excise on such goods. It was, therefore, necessary for the Tribunal to construe the said circular dated 24.9.1992 in its proper perspective. [Para 12) (89-C-D] 1.3. The circular refers to the fact that there had been lack of uniform classification of the said goods as a result whereof disparity H 84 SUPREME COURT REPORTS (2007] 12 S.C.R. A existed in the matter of pricing of commodity by the manufacturer. It is on the aforementioned premise that the decision of the High Court of Madhya Pradesh was referred to and sought to be acted upon. But the Court was not unmindful of the fact that only by reason of the said judgment, the law cannot be said to have b
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