CBEC Circular 39/99 upholds brand-rate drawback for re-rolled steel and processed fabrics; departmental circulars binding on revenue

SC held that CBEC Circular No. 39/99-Cus. (25 June 1999) validly extended brand-rate drawback to exporters of re-rolled steel products and processed fabrics. The HC correctly found that departmental circulars are binding on the revenue. The request to refer the matter to a larger Bench was refused, with SC relying on existing precedents (including a Constitution Bench decision) establishing that such circulars bind the department; accordingly the circular's extension of benefit to the impugned goods was upheld.

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Issues:
Interpretation of the binding nature of Circulars issued by the Central Board of Excise & Customs on the revenue department.

Analysis:
The Supreme Court granted leave in special leave petitions and agreed with the High Court's view that Circulars issued by the Central Board of Excise & Customs are binding on the department. The Court cited various decisions to support this, emphasizing the binding nature of Circulars issued under specific sections of relevant Acts on the revenue department. However, a different view in Hindustan Aeronautics Ltd. was deemed contrary to a subsequent Constitution Bench decision, thus not considered good law. The Court highlighted that the revenue department cannot take a stand contrary to the Circulars issued by the Board, as established in previous judgments.

Further Analysis:
The Court referenced Circular No. 39/99-Cus., dated 25th June, 1999, extending benefits to exporters for specific products. It affirmed the binding nature of Circulars issued by the Board on the department, rejecting the contention to refer the case to a larger Bench. The judgment dismissed Civil Appeals without costs and directed transferred cases to respective High Courts for fresh decisions based on the law laid down in the current judgment, emphasizing expeditious resolution.

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