Trade notice and departmental instructions cannot expand a statutory rule; penalty set aside, while the dropped duty demand stood.

A trade notice or departmental instruction cannot enlarge a statutory classification rule unless the statute expressly authorises such extension; because the claimed Board instructions were not produced and were not issued under Section 37B, the penalty could not be sustained and was set aside. A separate remark in the order dropping the duty demand did not cause prejudice or affect rights where no confirmed demand survived and the matter was already covered by earlier Tribunal authority, so expunction was not warranted. The duty demand remained dropped, while only the penalty failed.

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Issues: (i) Whether the remark in the order dropping the duty demand required expunction and affected the assessee's rights; (ii) Whether penalty was sustainable on the basis of a trade notice and departmental instructions.

Issue (i): Whether the remark in the order dropping the duty demand required expunction and affected the assessee's rights.

Analysis: The demand for duty had already been dropped. The isolated remark that the rate of duty applicable would be the rate applicable to the assessee clearing the goods did not cause prejudice, particularly when no confirmed demand was shown and the matter stood covered by the Tribunal's earlier decision on the point.

Conclusion: The remark did not warrant interference and the assessee was not entitled to expunction.

Issue (ii): Whether penalty was sustainable on the basis of a trade notice and departmental instructions.

Analysis: Penalty was sought to be justified on the footing that the classification was not filed in accordance with a trade notice said to have statutory force through Board instructions. In the absence of production of the claimed Board instructions, and since they were not issued under Section 37B, departmental instructions could not enlarge the scope of the statutory rule.

Conclusion: The penalty was unsustainable and was set aside.

Final Conclusion: The duty demand having been dropped was left undisturbed, while the penalty was deleted; the appeal succeeded only to that extent.

Ratio Decidendi: Departmental instructions or trade notices cannot enlarge a statutory rule unless the statute itself authorises such extension, and a penalty cannot be sustained on that basis.

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