1996 JTR(SC) 2129
1997 89 ELT 441 ; 1997 10 SCC 338 ; 1997 KHC 3736
SUPREME COURT OF INDIA
S.C.Sen : S.P.Bharucha
Collector Of Central Excise, Bombay
Versus
Kores India Limited, Thane
Case No. : .
Date of Decision : 12/10/96
The Revenue cannot advance arguments contrary to the terms of a Tariff Advice or Trade Notice issued by its own Board, even though such notices are not binding on the assessee, the tribunal, or the courts.
Act
Referred
:CENTRAL EXCISE ACT
: Item.68
(A) Excise Duty - Tariff Schedule - Item 17(2) and Item 68 - Classification of stencil skin - Whether stencil skin is classifiable under the residuary Tariff Item or under the item covering paper and paper board - Reliance on Tariff Advice and Trade Notice - While a Tariff Advice or Trade Notice issued by the Board does not bind the tribunal or the courts, and an assessee may argue that it is erroneous, it is not open to the Revenue to advance arguments that are contrary to the terms thereof. (Para 4)
Facts of the case:
A dispute arose regarding the classification of stencil skin for excise duty purposes. The tribunal held that the product was classifiable under a residuary Tariff Item and not under the item covering paper and paper board. This decision was based on a Tariff Advice stating that coated paper used for making stencil paper was an intermediate product and not excisable, and a Trade Notice stating that stencil paper should be treated as an article of stationery and therefore fall outside the purview of the paper and paper board item.
Findings of Court:
The court found that although the Revenue argued that Trade Notices and Tariff Advices are not relevant in construing Tariff Schedule items and do not bind quasi-judicial bodies, the Revenue cannot take a position that contradicts its own Board's directions.
Issues: Whether the Revenue is permitted to advance arguments contrary to the terms of a Tariff Advice or Trade Notice issued by its own Board.
Ratio Decidendi: A Tariff Advice or Trade Notice issued by the Board is not binding on the tribunal, the courts, or the assessee; however, the Revenue is precluded from arguing against the terms of such notices.
Result: Appeals dismissed.
Facts of the case:
A dispute arose regarding the classification of stencil skin for excise duty purposes. The tribunal held that the product was classifiable under a residuary Tariff Item and not under the item covering paper and paper board. This decision was based on a Tariff Advice stating that coated paper used for making stencil paper was an intermediate product and not excisable, and a Trade Notice stating that stencil paper should be treated as an article of stationery and therefore fall outside the purview of the paper and paper board item.
Findings of Court:
The court found that although the Revenue argued that Trade Notices and Tariff Advices are not relevant in construing Tariff Schedule items and do not bind quasi-judicial bodies, the Revenue cannot take a position that contradicts its own Board's directions.
Issues: Whether the Revenue is permitted to advance arguments contrary to the terms of a Tariff Advice or Trade Notice issued by its own Board.
Ratio Decidendi: A Tariff Advice or Trade Notice issued by the Board is not binding on the tribunal, the courts, or the assessee; however, the Revenue is precluded from arguing against the terms of such notices.
Result: Appeals dismissed.
Bindingness - The court observed that Trade Notices and Tariff Advices are not binding on quasi-judicial bodies when construing items in the Tariff Schedule.
JUDGMENT
S.P. BHARUCHA, J.
(1) THE Customs, Excise and Gold (Control) Appellate tribunal took the view that stencil skin was classifiable under the residuary Tariff Item 68 for the purposes of excise duty and not under Item 17(2 which covers paper and paper board, all sorts, including coated paper. In so doing the tribunal relied upon a Tariff Advice issued by the central Board of Excise and Customs on 20/11/1978. The Tariff Advice stated that the levy of duty on coated paper for making stencil paper had been under examination and it had been decided that coated paper was an intermediate product which did not come into the market either to be bought or sold. It was used in the manufacture of stencils and should be considered not excisable.
(2) THERE is a Trade Notice dated 1/3/1976, cited by the learned counsel for the respondent, that expressly deals with stencil paper; it states that stencil paper should be treated as an article of stationery and, therefore, outside the purview of Item 17.
(3) THE learned Additional Solicitor General, on behalf of the Revenue, has drawn our attention to the judgment of this court in CCE v. Krishna Carbon Paper Co. where it was observed, with reference to the Tariff Advice that dealt with coated paper, that Trade Notices and Tariff Advices were not relevant, as such in construing items in the Tariff Schedule. A quasi-judicial body exercising quasi-judicial powers was not bound by the directions of the central Board of Excise and Customs. It was, therefore, submitted by the learned Additional Solicitor General, that regardless of the Tariff Advice and Trade Notice, we should decide whether stencil skin fell under Item 68 as held by the tribunal or under Item 17(2 as contended by the Revenue.
(4) A Tariff Advice or a Trade Notice issued by the Board certainly does not bind the tribunal or the courts and an assessee may argue that it is erroneous; but it is not open to the Revenue to advance arguments that are contrary to the terms thereof. Upon this short ground alone, the appeals must be dismissed.
(5) ORDER accordingly.
(6) NO order as to costs.