Board Orders
Non Implementation of Circulars Contrary to SC Special Bench Order Set up on 28
Feb 2015
[CBEC Circular No. 1006 dated 21st
September 2015]
Subject: - 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been rescinded.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 14thOctober2008 [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 binding
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 Constitution’’
3. Therefore, it is clarified
that Board Circulars contrary to the judgements of Hon’ble Supreme Court become non-est in law and should not be followed.
Reference of such circulars should be made to the Board so that further action
of rescinding these circulars can be expeditiously taken up. Board may also
initiate such action suo-moto. All pending cases on the issue, including those
in the Call-Book, decided after the date of the judgement should, conform to
the law laid by the Hon’ble Supreme Court or High Court, as the case may be, irrespective of
whether the circular has been rescinded or not.
4. The above direction would
also apply to the judgements of Hon’ble High Court where Board has decided
that no appeal would be filed on merit. However where appeal has been filed by
revenue against the High Court’s order, pending adjudication should be
transferred to the Call-Book and such appeals should be kept alive.
5. Difficulty experienced,
if any, in implementing the circular should be brought to the notice of the
Board.
F.No.96/90/2015-CX.1