1997 Supreme(SC) 1141

1997(8) Supreme 19
SUPREME COURT OF INDIA
Suhas C. Sen, B.N. Kirpal, K.T. Thomas, JJ.
Collector of Central Excise, Patna -Appellant
versus
Usha Martin Industries etc. -Respondents
Civil Appeal No. 2390 of 1989
With
(Civil Appeal Nos. 2080-2081 of 1996, 10440-10441 of 1995)
Decided on 28-8-1997
Counsel for the Parties,
For the Appearing Parties, M. Gaurishankar Murthy, Ashok Srivastava, V.K. Verma, P. Parmeshwaran, S.K. Bagaria, Jaideep Gupta, Ajay K. Jain, Pramod Dayal, V. Sridharan, R. Nambirajan, V. Balachandran, Vinay Garg, Advocates.

Headnote:(i) EXCISE DUTY-Central Excise and Salt Act, 1944-Section 37-B-Tariff Item 26AA(1a)-Excise duty exemption-Benefit of-Whether can be claimed in respect of commodities made out of raw materials on which no excise duty was payable?-Notifications exempted such commodities from excise duty if they were produced from materials on which appropriate amount of duty of excise has already been paid-Respondent manufactures wire-rods from steel products including billets-Excise duty demanded on wire rods since billets were totally exempted from duty-Order reversed-Collector of Appeals held that input goods cleared on nil payment of excise duty should be treated as goods cleared after payment of appropriate amount of duty-Challenged-Held, benefit of exemption from duty can be claimed in respect of goods referred to in notifications the raw materials of which were not exigible to any excise duty.

       Held : There is no doubt that as per the above notification if any amount of duty has been paid on the raw material, the output product would escape from excise duty. The doubt arose was regarding the expression in the notification i.e. "on which the appropriate amount of duty of excise has already been paid" as to whether it is capable of two interpretations, one as claimed by the assessee and the other as putforth by the Revenue. (Para 6)

       What is the idea behind granting exemption to the commodities indicated in the notification? One reason is that Central Government wanted to save certain raw materials and the end products made with them from double duty. Another idea, as could be discerned from it, is that the reason which prompted the Central Government to absolve and commodity from duty must as well be applicable to the other commodity which is made out of the former. Therefore, we are not disposed to afford a narrow interpretation to the expression (i.e. on which the appropriate amount of duty of excise has already been paid) as excluding all cases where nil duty was paid for the input materials. (Para 12)

       Section 37-B of the Act enjoins on the Board a duty to issue such instructions and directions to the excise officers as the Board considers necessary or expedient "for the purpose of uniformity in the classification of excisable goods or with respect to levy of duty excised on such goods." It is true that Section 37B was inserted in the Act only in December, 1985 but that fact cannot whittle down the binding effect of the circulars or instructions issued by the Board earlier. Such instructions were not issued earlier for fancy or as rituals. Even the pre-amendment circulars were issued for the same purpose of achieving uniformity in imposing excise duty on excisable goods. So the circular, whether issued before December 1985 or thereafter should have the same binding effect on the department. (Para 19)

       Thus, looking from different angles we are inclined to take the view that benefit of exemption from duty can legitimately by claimed by the respondents in respect of those goods referred to in the notifications under consideration the raw materials of which were not exigible to any excise duty at all. (Para 22)

       (ii) Central Excise and Salt Act, 1944-Section 37-B-Inserted in the Act in December, 1985-Binding effect of the circulars or instructions issued by the Board earlier-Held, circular whether issued before December 1985 or thereunder should have the same binding effect on the department-Revenue cannot be permitted to take a stand contrary to instructions issued by the Board.

       Held : No doubt the court has to interpret statutory provisions and notifications thereunder as they are with emphasis to the intention of the legislature. But when the Board made all others to understand a notification in a particular manner and when the latter have acted accordingly, is it open to the Revenue to turn against such persons on a premise contrary to such instructions? (Para 18)

       Section 37-B was inserted in the Act only in December, 1985 but that fact cannot whittle down the binding effect of the circulars or instructions issued by the Board earlier. Such instructions were not issued earlier for fancy or as rituals. Even the pre-amendment circulars were issued for the same purpose of achieving uniformity in imposing excise duty on excisable goods. So the circular, whether issued before December 1985 or thereafter should have the same binding effect on the department. (Para 19)

       Through a catena of decisions this Court has pronounced that Revenue cannot be permitted to take a stand contrary to the instructions issued by the Board. It is a different matter that an assessee can contest the validity or legality of a departmental instruction. But that right cannot be conceded to the department, more so when others have acted according to such instructions. Of course the appellate authority is also not bound by the interpretation given by the Board but the assessing officer cannot take a view contrary to the Boards s interpretation. (Para 20)

       (iii) WORDS AND PHRASES-Words "paid" and "already paid"-Meaning of-Meaning of a particular English word used in a particular collocation of words need not be the exact meaning when used in other permutations.

       Held : If we take the words "already paid" in the notification delinked from other words employed therein, they would, perhaps, lend support to the contention of the Revenue as the said combination relates to an antecedent act of payment. But the word "already" is not the decisive term in the context because the preceding word "appropriate", cannot be sidelined to piffle. The word "appropriate" is defined in Websters s New Dictionary and Thesaurus (Concise Edition) as "applicable, apposite, appurtenant, apropos, apt...." In the World Book Dictionary it is defined as "right for the occasion, suitable, proper, fitting....." (Para 11)