UNION OF INDIA Vs. ARVIVA INDUSTRIES INDIA LIMITED

JUDGEMENT

(1.) Leave granted in the special leave petitions. We agree with the view taken, Arviva Industries (I) Ltd. Vs. Union of India, (2004) 5 Bom CR 664 by the High Court that the circulars issued by the Central Board of Excise and Customs are binding on the Department and the Department cannot be permitted to urge that the circulars issued by the Board are not binding on it.

(2.) This Court in a series of decisions has held that the circulars issued under Sec. 119 of the Income Tax Act, 1961 and Sec. 37-B of the Central Excise Act, 1944 are binding on the Revenue. [See Navnit Lai C. Javeri Vs. K.K. Sen, AIR 1965 SC 1375 : (1965) 56 ITR 198, Ellerman Lines Ltd. Vs. CIT, (1972) 4 SCC 474 : 1974 SCC (Tax) 304, K.P. Varghese Vs. ITO, (1981) 4 SCC 173 : 1981 SCC (Tax) 293, Union of India Vs. Azadi Bachao Andolan, (2004) 10 SCC 1, CCE Vs. Usha Martin Industries, (1997) 7 SCC 47, Ranadey Micronutrients Vs. CCE, (1996) 10 SCC 387, CCE Vs. Jayant Dalai (P) Ltd., (1997) 10 SCC 402, CCE Vs. Kores (India) Ltd., (1997) 10 SCC 338, Paper Products Ltd. Vs. CCE, (1999) 7 SCC 84 and Dabur India Ltd. Vs. CCE, (2004) 13 SCC 107 : (2003) 157 ELT 129.]

(3.) A slightly different approach was taken by this Court in Hindustan Aeronautics Ltd. Vs. CIT, (2000) 5 SCC 365 by two learned Judges which runs counter to the decisions referred to above. The view taken in Hindustan Aeronautics Ltd., (2000) 5 SCC 365 being contrary to the subsequent decision of the Constitution Bench of this Court in CCE Vs. Dhiren Chemical Industries, (2002) 2 SCC 127 cannot be taken to be good law.