MANU/EXCR/0013/2015

Ministry : Ministry of Finance

Department/Board : CBEC Excise

Circular No. : 1006/13/2015-CX

Date : 21.09.2015

To

Principal Chief Commissioner / Chief Commissioner of Central Excise, Service Tax and Customs (All),
Principal Commissioner of Central Excise, Service Tax and Customs (holding charge of
Chief Commissioner) (All),
Web-master, CBEC

Madam/sir,

Clarification regarding binding nature of circular and instructions

A large number of judgements have been delivered by the Hon'ble Supreme Court on various aspects of Central Excise, Service Tax or Customs consequent upon the constitution of special bench on 28.02.2015 to expeditiously decide appeals in Indirect taxes. However, there may be Board circulars on some of these issues which are contrary to the judgement delivered by Hon'ble Supreme Court. The issue is whether the field officers are bound by such circulars, during the period the circular has not been rescinded.

2. In this regard, attention is invited to the judgement of Hon'ble Supreme Court dated 14th October 2008 [2008(231) E.L.T.22(SC)/2008-TIOL-104-SC-CX-CB] in case of M/s Ratan Melting & Wire Industries Vs Commissioner of Central Excise, Bolpur. In the said judgement Hon'ble Supreme Court has held at para 6 & 7 that-

"6. Circular and instructions issued by the Board are no doubt binding in law on the authorities under the respective statutes, but 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 High Court. 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. They are not upon the court. It is for the court to declare what the particular provision of statute says and it is not for the Executive. Looked at from other angle, a circular which is contrary to the statutory provisions has really no existence in law...

7........... to lay content with the circular would mean that the valuable right of challenge would be denied to him and there would be no scope for adjudication by the High Court or the Supreme Court. That would be against very concept of majesty of law declared by Supreme Court and the binding effect in terms of Article 141 of the........