Board circulars cannot override statute, and settled precedent can eliminate any substantial question of law.

A Board circular or executive instruction cannot override the statute or the law declared by courts, and departmental authorities are bound by it only to the extent it is consistent with the Act. Applying that principle to Circular No. 98/1/2008-Service Tax dated 04.01.2008, the Court noted that the controversy was already covered by settled precedent and that the circular could not support the revenue's case. As a result, no substantial question of law arose for adjudication, and the revenue's challenge failed.

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Issues: Whether the revenue's appeal raised any substantial question of law in view of the binding effect and legality of the Board circular on which the dispute rested.

Analysis: The dispute turned on Circular No. 98/1/2008-Service Tax dated 04.01.2008. The Court noted that the issue had already been considered by other High Courts and by the Supreme Court's settled principle that circulars and executive instructions are binding on departmental authorities only so long as they are consistent with the statute, but they cannot prevail over the law declared by the courts. A circular contrary to statutory provisions has no existence in law. Applying that principle, and agreeing with the reasoning adopted in the cited decisions, the Court held that the circular could not sustain the revenue's case and that no substantial question of law arose for adjudication.

Conclusion: The appeal was not maintainable on merits as no substantial question of law arose, and the finding was against the revenue.

Final Conclusion: The impugned order was left undisturbed, and the revenue's challenge failed.

Ratio Decidendi: A Board circular or executive instruction that is contrary to the statute cannot be enforced, and where the controversy is fully covered by settled precedent, no substantial question of law arises.

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