SHIVA TAXFABS LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) The petitioners six in number have prayed for quashing of Circular No. 929/19/2010-CX dated 29 th June, 2010, issued by respondent No. 3, Central Board of Excise and Customs, Ministry of Finance (Board, for short). It is alleged that the circular is patently illegal and contrary to the ratio approved and held by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT, for short), Northern Bench, New Delhi in the Commissioner of Central Excise, Kanpur vs. G.P.L. Polyfils Ltd.,2005 183 ELT 27.

(2.) The contentions of the petitioners are three fold. The decision in the case of GPL Polyfils Ltd. (supra) was accepted by the respondents and was not challenged. The said decision, therefore, is binding on the respondents in view of the principle of consistency and uniformity. Reliance is placed on Union of India Vs. Kaumudini, 2001 10 SCC 231; Berger Paints India Ltd. vs. CTI, 2004 12 SCC 42; Indian Oil Corporation vs. CCE, Baroda,2007 13 SCC 803; Commissioner of Central Excise, Bangalore vs. Bal Pharma Ltd., 2011 2 SCC 620; and Sunflag Iron & Steel C. Ltd. vs. Additional Collector of Central Excise, Nagpur, 2003 162 ELT 105. It is highlighted that the authorities have been asked to ignore the decision of the tribunal in GPL Polyfils Ltd. (supra). Secondly, the circular is contrary to the statute as Chapter note I of Chapter 54 to the Central Excise Tariff has been ignored. The Chapter Note is an integral and principal part of the statute as held by the Supreme Court in Subhash Photographic vs. Union of India, 1993 Supp3 SCC 323. Therefore, the circular which is contrary to the statutory provisions has no existence in law (ref. Commissioner of Central Excise, Bolpur vs. Ratan Melting & Wire Industries, 2008 13 SCC 1. Lastly, on the merits also it is submitted that the activity undertaken by the petitioners is not excisable and the impugned circular is contrary to law.

(3.) The respondents have contested the aforesaid contentions. On merits, it is submitted that the Chapter note I of Chapter 54, does not help and support the contentions of petitioners. Reliance is placed on the definition of the term 'manufacture' in the definition clause 2(f) of the Central Excise Act, 1944 (Act, for short) to controvert the first contention. To draw support, the respondents have referred to Plasmac Machine Mfg. Co. Pvt. Ltd. vs. Collector of Central Excise, 1991 51 ELT 161; Elson Machines Pvt. Ltd. vs. CCE, 1988 38 ELT 571; Faridabad CT Scan Centre Vs. D.G. Health Services, 1997 95 ELT 161; B.J. Akkara, Col. (Retd.) vs. Govt. of India, 2007 207 ELT 3; Sharp Industries Ltd. vs. Commissioner of Central Excise, 2005 7 SCC 676; Rajasthan State Electricity Board & Ors. vs. Laxman Lal & Ors., 1991 Supp2 SCC 531; State of Maharashtra vs. Digambar, 1995 4 SCC 683; Union of India vs. Delhi Cloth and General Mills Co. Ltd., 1963 AIR(SC) 791; Sterling Foods vs. State of Karnataka, 1986 AIR(SC) 1809; Aditya Mills Ltd. vs. Union of India, 1988 37 ELT 471 and Collector of Central Excise, Bombay vs. K.W H Heliplastics, 1998 97 ELT 385. It is submitted that the order of the Tribunal in GPL Polyfils Ltd. (supra), is per incuriam and cannot be treated as a precedent. On the question of the circular and the right of the Board to issue circulars, it is submitted that the same has been validly issued under Section 37B of the Act.