Tax circulars cannot override independent assessment or compel officers to ignore earlier tribunal rulings.

Non-filing of an appeal in one tax matter does not, by itself, prevent the Revenue from taking a different stand in another case, because consistency cannot override statute, estoppel does not operate across different assessments in the manner claimed, and a contrary view may still be open where just cause exists or the earlier view is distinguishable. A circular issued under Section 37B may promote uniformity, but it cannot compel assessing authorities to ignore a prior tribunal ruling or replace their independent quasi-judicial judgment. The assessing authority must consider the tribunal decision and treat the circular only as guidance; the impugned circular portion directing otherwise was invalidated.

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Issues: (i) whether the Revenue was barred from taking a contrary stand merely because it had not challenged an earlier tribunal decision; (ii) whether the impugned circular could bind the assessing authorities and exclude reliance on the tribunal decision in future cases.

Issue (i): Whether the Revenue was barred from taking a contrary stand merely because it had not challenged an earlier tribunal decision.

Analysis: Non-filing of an appeal in one matter does not, by itself, preclude the Revenue from contesting the same question in another matter. In tax matters, consistency is desirable, but it does not operate as an absolute bar where a just cause exists, public interest is involved, divergent views have emerged, or the earlier view is shown to be per incuriam or distinguishable. The doctrine of estoppel cannot override statute and does not apply across different assessments or different assessees in the manner urged.

Conclusion: The first contention was rejected and the Revenue was held not to be barred from taking a contrary stand in an appropriate case.

Issue (ii): Whether the impugned circular could bind the assessing authorities and exclude reliance on the tribunal decision in future cases.

Analysis: A circular issued under Section 37B of the Central Excise Act, 1944 may be used to secure uniformity, but it cannot compel a particular assessment or prevent quasi-judicial authorities from independently deciding the issue. A circular that directs officers to ignore an earlier tribunal ruling, even if facts are similar, goes beyond the permissible scope of administrative instructions. The assessing authority must examine the matter independently, consider the tribunal decision, and treat the circular only as guidance. The court also declined to decide the disputed technical question on the merits of classification in writ jurisdiction.

Conclusion: Paragraph 10 of the circular was struck down, and the circular was held not binding on the assessing authorities.

Final Conclusion: The writ petition succeeded only to the extent that the offending portion of the circular was invalidated and the authorities were directed to decide classification independently while giving due regard to the earlier tribunal ruling.

Ratio Decidendi: In tax administration, a binding circular cannot curtail the independent quasi-judicial function of the assessing authority or compel disregard of a prior tribunal decision, and non-challenge of an earlier order does not by itself bar the Revenue from taking a different stand where just cause exists.

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