Binding appellate rulings govern stenter capacity computation; revenue authorities cannot rely on a contrary clarification without a stay.

Under the special capacity-based levy scheme for textile processors, the treatment of galleries attached to a stenter turns on whether the attached installation functions as "other equipment" for computing annual production capacity. The clarification said such galleries were to be counted if they aided heat setting or drying, but the Tribunal had already held that a gallery without rails, fan or radiator could not by itself fall within that expression. The operative principle is that subordinate excise authorities must follow the Tribunal's ruling unless it is stayed, and they cannot apply a contrary clarification while making assessments.

---

---

Issues: Whether the impugned clarification issued under the special levy scheme for hot air stenter processors could be set aside, and whether the authorities were bound to follow the Tribunal's view on the question whether galleries attached to a stenter could be treated as "other equipment" for computing annual production capacity.

Analysis: Section 3A of the Central Excise Act, 1944 and the Rules framed thereunder created a special capacity-based levy scheme for notified textile processors. The clarification stated that galleries installed or attached to the stenter and aiding heat setting or drying were to be taken into account, but the Tribunal had already held that a gallery without rails, fan, or radiator could not itself fall within "other equipment" under the relevant rule. The Court held that subordinate excise authorities were bound by the Tribunal's order in accordance with judicial discipline and could not ignore it merely because an appeal against that order was contemplated or pending, absent any stay. The clarification could not control the assessment contrary to the binding appellate ruling; instead, the factual question whether any attached equipment in a gallery aided the process had to be examined case by case in accordance with the Tribunal's decision.

Conclusion: The challenge to the circular/clarification was not accepted, but the authorities were directed, in effect, to follow the Tribunal's ruling and not the impugned clarification while determining excise duty under Section 3A.

Final Conclusion: The writ petitions did not succeed in obtaining quashing of the clarification, and the assessment authorities were required to proceed in conformity with the binding appellate order on the relevant capacity-determination issue.

Ratio Decidendi: Subordinate revenue authorities must follow binding appellate orders on the same issue and cannot apply a contrary circular or clarification unless its operation has been stayed.

---