The Central Board of Excise and Customs (CBEC) has issued an important circular (1006/13/2015-CX, dated September 21) regarding the binding nature of its circulars and instructions.
A large number of judgements have been delivered by the Supreme Court on various aspects of central excise, service tax or customs. The issue was whether field formations should be bound by these judgements or by the board circulars or instructions that differ from these. The issue arose because CBEC was not amending or withdrawing circulars conflicting with the judgements.
Till now, it was non-committal on the issue. Now, it says that circulars - contrary to the judgements of the Supreme Court (SC) - should not be followed. So, too, on the High Court (HC) judgements where the board has decided no appeal would be filed.
In the case of Ranadey Micronutrients [1996 (087) ELT 0019 (SC)], the SC had held that CBEC circulars are not advisory in character but binding on lower level officers.
In the case of Dhiren Chemical Industries [2002 (143) ELT 0019 (SC)], the apex court held: "Regardless of the interpretation we have placed on the said phrase, if there are circulars which have been issued by the CBEC which place a different interpretation upon the said phrase and that interpretation will be binding upon the revenue (officers)".
This decision was doubted in the case of Indian Oil Corporation [2004 (165 ELT 257 (SC)]. Finally, in the case of Ratan Melting and Wire Industries [2008 (231) ELT 22 (SC)], it held: "When the Supreme Court or the High Court declares the law on the question arising for consideration, it would not be appropriate for the court to direct that the circular should be given effect to and not to a view expressed in a decision of this court or the HC.
So far as the clarification/circulars issued by the central government and of the state government are concerned, they represent merely their understanding of the statutory provisions. These are not binding upon the court. It is for the court to declare what the particular provision of a statute says and not for the executive… a circular contrary to the statutory provisions has really no existence in law...."
Thus, the issue of binding effect of departmental instructions on field formations went through several judicial pronouncements.
Now, CBEC has clearly stated that all instructions should conform to the law laid by the SC or HC, as the case may be, irrespective of what the circulars might say. It intends to now review all its circulars, identify those contrary to settled case laws, and rescind or amend these. It will help if CBEC puts out a list of judgements that must be compulsorily followed by the field formations.
Last week, I'd said the commerce ministry should make available information on duty rates in other countries for their imports. I am informed that a private website -www.indiabr.com - gives all the relevant information. And, that the www.indiantradeportal.in gives information on preferential tariffs in other countries for their imports from specified countries.
A large number of judgements have been delivered by the Supreme Court on various aspects of central excise, service tax or customs. The issue was whether field formations should be bound by these judgements or by the board circulars or instructions that differ from these. The issue arose because CBEC was not amending or withdrawing circulars conflicting with the judgements.
Till now, it was non-committal on the issue. Now, it says that circulars - contrary to the judgements of the Supreme Court (SC) - should not be followed. So, too, on the High Court (HC) judgements where the board has decided no appeal would be filed.
In the case of Ranadey Micronutrients [1996 (087) ELT 0019 (SC)], the SC had held that CBEC circulars are not advisory in character but binding on lower level officers.
In the case of Dhiren Chemical Industries [2002 (143) ELT 0019 (SC)], the apex court held: "Regardless of the interpretation we have placed on the said phrase, if there are circulars which have been issued by the CBEC which place a different interpretation upon the said phrase and that interpretation will be binding upon the revenue (officers)".
This decision was doubted in the case of Indian Oil Corporation [2004 (165 ELT 257 (SC)]. Finally, in the case of Ratan Melting and Wire Industries [2008 (231) ELT 22 (SC)], it held: "When the Supreme Court or the High Court declares the law on the question arising for consideration, it would not be appropriate for the court to direct that the circular should be given effect to and not to a view expressed in a decision of this court or the HC.
So far as the clarification/circulars issued by the central government and of the state government are concerned, they represent merely their understanding of the statutory provisions. These are not binding upon the court. It is for the court to declare what the particular provision of a statute says and not for the executive… a circular contrary to the statutory provisions has really no existence in law...."
Thus, the issue of binding effect of departmental instructions on field formations went through several judicial pronouncements.
Now, CBEC has clearly stated that all instructions should conform to the law laid by the SC or HC, as the case may be, irrespective of what the circulars might say. It intends to now review all its circulars, identify those contrary to settled case laws, and rescind or amend these. It will help if CBEC puts out a list of judgements that must be compulsorily followed by the field formations.
Last week, I'd said the commerce ministry should make available information on duty rates in other countries for their imports. I am informed that a private website -www.indiabr.com - gives all the relevant information. And, that the www.indiantradeportal.in gives information on preferential tariffs in other countries for their imports from specified countries.
Email: tncrajagopalan@gmail.com