TaxTMI 
TaxTMI 
2011 (9) TMI 116
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.... of GPL Polyfils Ltd. (supra) was accepted by the respondents and was not challenged. The said decision, therefore, is binding on the respondents in view of the principle of consistency and uniformity. Reliance is placed on Union of India vs. Kaumudini, (2001) 10 SCC 231; Berger Paints India Ltd. vs. CTI, (2004) 12 SCC 42; Indian Oil Corporation vs. CCE, Baroda, (2007) 13 SCC 803; Commissioner of Central Excise, Bangalore vs. Bal Pharma Ltd., (2011) 2 SCC 620; and Sunflag Iron and Steel C. Ltd. vs. Additional Collector of Central Excise, Nagpur, 2003 (162) ELT 105 (Bom.). It is highlighted that the authorities have been asked to ignore the decision of the tribunal in GPL Polyfils Ltd. (supra). Secondly, the circular is contrary to the statute as Chapter note I of Chapter 54 to the Central Excise Tariff has been ignored. The Chapter Note is an integral and principal part of the statute as held by the Supreme Court in Subhash Photographic vs. Union of India, 1993 Supp (3) SCC 323. Therefore, the circular which is contrary to the statutory provisions has no existence in law (ref. Commissioner of Central Excise, Bolpur vs. Ratan Melting and Wire Industries, (2008) 13 SCC 1). Lastly, on....
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....assessee relies upon a contrary decision of a tribunal or High Court which has not been challenged; Whether it is open to the Revenue to challenge correctness of a ratio or a decision which has been accepted in case of one assessee, in cases of other assessees. The larger Bench of the Supreme Court while deciding the reference, has quoted paragraphs 20 and 22 from BSNL vs. Union of India, (2006) 3 SCC 1, which read as under:- "20. The decisions cited have uniformly held that res judicata does not apply in matters pertaining to tax for different assessment years because res judicata applies to debar courts from entertaining issues on the same cause of action whereas the cause of action for each assessment year is distinct. The courts will generally adopt an earlier pronouncement of the law or a conclusion of fact unless there is a new ground urged or a material change in the factual position. The reason why the courts have held parties to the opinion expressed in a decision in one assessment year to the same opinion in a subsequent year is not because of any principle of res judicata but because of the theory of precedent or the precedential value of the earlier pronouncement. Wh....
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.... not choose to file appeals against certain judgments of the High Court rendered in writ petitions when they are considered as stray cases and not worthwhile invoking the discretionary jurisdiction of this Court under Article 136 of the Constitution, for seeking redressal therefor. At other times, it is also possible for the State, not to file appeals before this Court in some matters on account of improper advice or negligence or improper conduct of officers concerned. It is further possible, that even where SLPs are filed by the State against judgments of the High Court, such SLPs may not be entertained by this Court in exercise of its discretionary jurisdiction under Article 136 of the Constitution either because they are considered as individual cases or because they are considered as cases not involving stakes which may adversely affect the interest of the State. Therefore, the circumstance of the non-filing of the appeals by the State in some similar matters or the rejection of some SLPs in limine by this Court in some other similar matters by itself, in our view, cannot be held as a bar against the State in filing an SLP or SLPs in other similar matter(s) where it is conside....
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.... the taking over by operation of Section 3(4) recommendation is complete, they do not become the employees of the Government under Section 4 of the Act. The Government in exercise of the power under Section 8 constituted a committee and directed to enquire and recommend the feasibility to take over the schools. On the recommendation made by them, the Government have taken decision on 13-1-1981 by which date the respondents were not duly appointed as the employees of the taken over institution. Therefore, the High Court cannot issue a mandamus directing the Government to act in violation of law." 8. In CCE v. Hira Cement at para 24 the position was reiterated. 9. In Govt. of A.P. v. V.J. Cornelius it was observed that equity is not the relevant factor for the purpose of interpretation. 10. It will be relevant to note that in Karamchari Union v. Union of India and Union of India v. Kaumudini Narayan Dalal this Court observed that without a just cause Revenue cannot file the appeal in one case while deciding not to file appeal in another case. This position was also noted in CIT v. Shivsagar Estate. 11. The order of reference would go to show that same was necessary becaus....
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....n be taken by the Revenue/authorities when the High Court having jurisdiction over the authorities has decided the question. A decision of the High Court is a binding precedent. In view of the reference decided by the Supreme Court, it has to be held that the Revenue can prefer appeals or take a contrary stand to what has been held by the tribunal even if they have not preferred an appeal, when a "just cause" is established and can be shown. Mere fact that the Revenue has not preferred an appeal or challenged the same, does not bar the Revenue from preferring an appeal or taking a different stand in another case where there is a just cause or it is in public interest to do so or when a pronouncement of the higher Court is different and/or divergent views are expressed by the Tribunals or the High Courts (other than jurisdictional High court). The first contention raised by the petitioner is answered accordingly. 9. This brings us to the second question relating to the validity of the Circular. The aforesaid circular reads as under:- "Circular No. 929/19/2010-CX F.No. 55/1/2010-CS.1 Government of India Ministry of Finance Department of Revenue New Delhi the, June 29....
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...." means staple fibres and filaments of organic polymers produced by manufacturing processes, either:- (a) by polymerisation of organic monomers to produce polymers such as polyamides, polyesters polyolefins or polyurethanes, or by chemical modification of polymers produced by this process [for example, poly (vinyl alcohol) prepared by the hydrolysis of poly (vinyl acetate)]; or (b) by dissolution or chemical treatment of natural organic polymers (for example, cellulose) to produce polymers such as cuprammonium rayon (cupro) or viscose rayon, or by chemical modification of natural organic polymers (for example, cellulose, casein and other proteins, or alginic acid), to produce polymers such as cellulose acetate or alginates. The terms "synthetics" and "artificial", used in relation to fibres, mean: synthetic: fibres as defined at (a); artificial: fibres as defined at (b). Strip and the like of heading 5404 or 5405 are not considered to be man-made fibres. The term "man-made", "synthetic" and "artificial" shall have the same meanings when used in relation to "textile materials". 7. Thus manmade fibre can be obtained either starting from monomers or from polymers itself....
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....nd explained by the Supreme Court in several cases. In State of Kerala v. Kurian Abraham (P) Ltd., (2008) 3 SCC 582, it has been held as under:- "23. Tax administration is a complex subject. It consists of several aspects. The Government needs to strike a balance in the imposition of tax between collection of revenue on one hand and business-friendly approach on the other hand. Today, Governments have realised that in matters of tax collection, difficulties faced by the business have got to be taken into account. Exemption, undoubtedly, is a matter of policy. Interpretation of an entry is undoubtedly a quasi-judicial function under the tax laws. Imposition of taxes consists of liability, quantification of liability and collection of taxes. Policy decisions have to be taken by the Government. However, the Government has to work through its senior officers in the matter of difficulties which the business may face, particularly in matters of tax administration. That is where the role of the Board of Revenue comes into play. The said Board takes administrative decisions, which includes the authority to grant administrative reliefs. This is the underlying reason for empowering the Bo....
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....on 119 irrespective of its nomenclature. Apart from sub-section (1), sub-section (2) of Section 119 also enables CBDT:- 'for the purpose of proper and efficient management of the work of assessment and collection of revenue, to issue appropriate orders, general or special, in respect of any class of income or class of cases, setting forth directions or instructions (not being prejudicial to the assessees) as to the guidelines, principles or procedures to be followed by other Income Tax Authorities in the work relating to assessment or collection of revenue or the initiation of proceedings for the imposition of penalties'. In our view, the High Court was not justified in reading the circular as not complying with the provisions of Section 119. The circular falls well within the parameters of the powers exercisable by CBDT under Section 119 of the Act. 27. Lastly, the binding effect of the said Circular No. 16/98 needs to be kept in mind. As stated above, the said circular was issued by the Board by exercising statutory powers vested in it under Section 3(1-A). As stated above, Section 3(1-A) provides for an enabling power of the Board which was recognised as an authority un....
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....0 of the circular states that the decision of the Tribunal in GPL Polyfils Ltd. (supra) would be relevant to the facts of that particular case and is not a binding precedent in other matters. It stipulates that even if the facts and the process are identical, other assessees cannot rely upon the decision in GPL Polyfils Ltd. (supra) before the Revenue authorities. In the written submissions and during the course of the argument, the Revenue took a forthright and categorical stand that the said decision is incorrect and per incuriam. Intention of the Revenue in paragraph 10 of the circular is apparent, Revenue authorities should not follow the decision of the CESTAT in GPL Polyfils Ltd. (supra). Paragraph 10 of the said circular is accordingly struck down. 14. The petitioners and the Revenue have taken divergent stand on interpretation of Chapter note 1 to Chapter 54 and whether petitioners are 'manufacturing' a taxable commodity, polyester stable fibre. As noticed above, the respondents have also relied upon definition clause 2(f). The circular in question refers to the process by which the purported 'manufacture' takes place. The stand of the petitioners is to the contrary and ....
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.... the contentions raised by the petitioners without being influenced or treating the circular as binding. The Revenue/adjudicatory authorities will independently apply their mind and take into consideration the decision of the Tribunal in GPL Polyfils Ltd. (supra). They will also examine whether the said decision is applicable or state if they feel that there are good grounds and reasons (i.e. just cause) why the said decision should not be applied and questioned in appeal etc. The circular will be read as a guideline and not a binding mandate. Secondly, the petitioners can be protected by ensuring that in case the authorities hold that the decision in GPL Polyfils Ltd. (supra) is not to be applied even if facts are similar, then the demands should not be recovered by adopting coercive measures till stay applications are decided by the CESTAT. This direction is necessary, as a piquant situation has been created by the Revenue. Equities have to be balanced. The earlier decision of the CESTAT in GPL Polyfils Ltd. (supra) should be given due regard if the petitioners are able to show that the same applies, unless the same is set aside. (See judgment dated 6th July, 2011 in Civil Appeal....