Supreme Court rulings override circulars; Larger Bench to clarify.

The Court emphasized that Supreme Court decisions are binding on the Revenue/Department, overriding any conflicting views expressed in circulars. Circulars issued by the Central Board of Excise and Customs cannot supersede Supreme Court judgments, ensuring uniformity in legal interpretation. The Court referred the matter to a Larger Bench of five Judges for definitive clarification on the validity of circulars vis-a-vis Supreme Court decisions, aiming to resolve conflicting views and establish a clear legal position.

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Issues:
1. Interpretation of circulars issued by the Central Board of Excise and Customs.
2. Binding nature of judgments of the Supreme Court on Revenue/Department.
3. Clarification on the validity of circulars vis-a-vis Supreme Court judgments.
4. Referral to a Larger Bench for clarification on conflicting views.

Interpretation of Circulars:
The appeal highlighted a discrepancy between two Supreme Court decisions, one overruling the other. The respondent argued that a specific paragraph in the overruled decision favored their case. This paragraph stated that circulars issued by the Central Board of Excise and Customs, if differing in interpretation from the Court's decision, would be binding on the Revenue. Subsequent cases noted this observation but clarified that Court decisions are the law of the land and must be followed by all Courts, Tribunals, and bodies. Circulars cannot override Supreme Court decisions, ensuring uniformity in legal interpretation.

Binding Nature of Supreme Court Judgments:
The Court emphasized that its decisions are binding on the Revenue/Department, rendering any contrary views expressed in circulars invalid. The law declared by the Supreme Court prevails over circulars, which lose their validity once the Court establishes a legal position. This principle ensures consistency and adherence to the highest judicial authority in legal matters.

Validity of Circulars vs. Supreme Court Judgments:
While previous judgments attempted to clarify the implications of the paragraph in question from the overruled decision, the Court expressed the need for a Larger Bench to provide definitive clarification. Despite attempts to interpret and align with the earlier decision, the Court deemed it appropriate for a Bench of similar strength to address and resolve any ambiguity, emphasizing the importance of clarity and consistency in legal interpretation.

Referral to Larger Bench:
Acknowledging the need for a comprehensive resolution due to conflicting views in different cases, the Court referred the matter to a Larger Bench comprising five Judges. This referral aimed to ensure a thorough examination and clarification of the legal position, particularly concerning the interpretation of circulars vis-a-vis Supreme Court judgments. The papers were to be placed before the Chief Justice of India for the constitution of the appropriate Bench, underscoring the significance of resolving the issue with a robust and authoritative decision.

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