TaxTMI 
TaxTMI 
2008 (9) TMI 893
X X X X Extracts X X X X
X X X X Extracts X X X X
....carrying on the business as a distributor for sale of aluminium composite panel among other products. In order to have an absolute clarity on the aspect of the appropriate rate of tax applicable on the sale of goods he filed an application under section 59(4) of the Act to the second respondent requesting for clarification of the rate of tax applicable on aluminium composite panel and PVC flexible film on December 8, 2005. Along with the application he also enclosed copies of the bill of entries relating to import of these goods in which the commodity imported was described as "aluminium (plastic composite) panel sheet interior". It falls under Chapter 39 of the Central Excise Tariff Act, 1985 (for short, hereinafter referred to as, "the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....clear that the earlier clarification dated February 2, 2006 stood withdrawn from the date of its issue. Annexure C is the said clarification. Aggrieved by the same, the petitioner has preferred this writ petition. The respondents have filed a counter. It was contended that on a thorough examination of the goods in question by the second respondent, it revealed that the commodity in question is made of aluminium sheets on either side and thick plastic sheet in the middle. It is sold/dealt by the dealer in building materials/decorative tiles materials. It is not dealt by the petitioner as plastic goods. It is used for fixing on the wall in building and used as industrial input. Central Excise Tariff Code 3920.10.19 relates to plastic artic....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pondents have sought for dismissal of the writ petition. Sri R.V. Prasad, learned counsel for the petitioner, assailing the impugned clarification submits that in the first place the clarification is contrary to what is contained in Chapter 39 of the Tariff Act and therefore, it is liable to be set aside. Even otherwise, the earlier clarification issued by the second respondent on which the petitioner has acted upon is binding on the Department till it is withdrawn, modified or rectified and therefore, the impugned clarification cannot be retrospective, but it can only be prospective. Per contra, learned Government Advocate submitted that the second respondent who had issued the earlier clarification has the power to withdraw the said....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sioner of Income-tax, Kerala reported in [1986] 158 ITR 102 has held that the earlier circulars being executive in character cannot alter the provisions of the Act. These were in the nature of concessions and could always be prospectively withdrawn. Again the Supreme Court, in the case of Bengal Iron Corporation v. Commercial Tax Officer reported in [1993] 90 STC 47, has held that the clarification and circular issued by the Central Government and/or the State Government represents merely their understanding of the statutory provisions. They are not binding upon the courts. It is true that those clarifications and circulars were communicated to the concerned dealers but even so nothing prevents the State from recovering the tax, if in tr....