Notification prevails over conflicting circular on duty for domestic tariff area clearances by export oriented units

A Board circular could not confer a concessional duty rate for clearances by a 100% export oriented unit to the domestic tariff area where the governing notification did not permit that treatment. The notification had statutory force and prevailed over any conflicting clarification in the circular. Accordingly, the exemption scheme had to be applied as framed by the notification, and the unit remained liable to duty on the terms of that notification.

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Issues: Whether clearances by a 100% export oriented unit to the domestic tariff area were entitled to duty at 50% of the aggregated customs duty on the basis of the Board's circular, despite the notification governing such clearances.

Analysis: The unit relied on the Board's circular to justify payment of duty at 50% of the aggregated customs duty for domestic tariff area clearances. The governing notification, however, excluded such clearances from its scope in the manner urged by the appellants. Where the circular is inconsistent with the notification, the notification has legal sanctity and must prevail. Any clarification contrary to the notification could not override the exemption scheme framed by the notification itself.

Conclusion: The duty demand based on the notification was sustained. The appellants were not entitled to claim the benefit of the circular against the notification, and the appeals were dismissed.

Final Conclusion: The governing notification was held to prevail over the conflicting circular, leaving the duty liability intact and the appellate challenge unsuccessful.

Ratio Decidendi: A circular cannot override a notification having statutory force; where there is conflict, the notification prevails and governs the duty liability.

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