IMPORTANT POINT
It is well settled proposition of law that Circulars and instructions issued by the Central Board of Excise and Customs are no doubt binding in law on the authorities under the respective Statutes but when this Court or the High Court declares the law on the question arising for consideration, it would not be appropriate for the Courts or the Tribunal, as the case may be, to direct that the Board’s Circular should be given effect to and not the view expressed in a decision of this Court or a High Court.

JUDGMENT

D.K. Jain, J.:

1. The Commissioner of Central Excise has preferred this batch of Civil Appeals under Section 35-L(b) of the Central Excise Act, 1944 (for short “the Act”), questioning the correctness of the orders passed by the Customs, Excise and Service Tax Appellate Tribunal, West Regional Bench at Mumbai (for short “the Tribunal”) whereby the appeals filed by the respondent-assessee (for short “the assessee”) have been allowed and the applications filed by the Commissioner for rectification of mistakes in the main orders have been dismissed.

2. As all the appeals involved a common question of law, pertaining to the same assessee, these were heard together and are being disposed of by this common judgment. However, in order to appreciate the issue involved and the rival stands thereon, for the sake of convenience, we shall advert to the facts emerging from C.A. No. 7627 of 2005 arising out of Tribunal’s order in appeal No. E/1050/03-Mum and E/Rom-691/04- Mum.

3. The assessee, a body Corporate, is engaged in the manufacture and clearance of “Rosin” and “Turpentine Oil”. As per some literature placed on record, “Rosin” is the resinous constituent of the Oleo-resin exuded by various species of pine, known in commerce as crude turpentine. The separation of the Oleo-resin into the essential oil-spirit of turpentine and common Rosin is effected by distillation in large copper stills. “Rosin” and “Turpentine Oil” are classifiable under Chapter Heading Nos. 38.06 and 38.05 respectively of the First Schedule to the Central Excise Tariff Act, 1985 (for short “the Tariff Act”). The assessee filed the requisite classification declarations with the Deputy Commissioner, Central Excise, classifying their finished goods i.e. “Rosin” under the Sub- heading 3806.19 and “Turpentine Oil” under Sub-heading 3805.19, both bearing `nil’ rate of duty, on the ground that the said goods were being manufactured by them without the aid of power. The Deputy Commissioner accepted the classifications under the said Sub-headings but treated the said goods as “in or in relation to the manufacture of which any process is ordinarily carried on with the aid of power”, attracting rate of duty @ 16%. According to the Deputy Commissioner the assessee is using 5 Hp electric motor for lifting water from the well for storage tank at the ground level; the main raw material namely, Oleo-pine Rosin is lifted to the manufacturing platform by manually operated chain pulley block; the raw material is heated in a melting tank - a “Bhatti” fired with coal; the molten raw material is then transferred to settling tanks where it is kept in the liquid form and stirred by manually operated agitators so that the impurities may settle down; the impurities are separated and purified raw material is transferred in the main tank (Distillery) where it is again heated upto 1800C; at this temperature, the vapours of turpentine oil are formed and finally the “Turpentine Oil” is collected by the process of distillation through the condensers by sprinkling water on the condensers from the water storage tanks installed at a height of 30 ft.; water for the tanks is lifted from the storage tanks at the ground level by using 2 Hp electric motor. “Rosin” which settles down in the Distillery, is collected separately. The Deputy Commissioner was of the view that the water being an important input for the manufacturing process of “Rosin” and “Turpentine Oil”, its further lifting upto the height of 30 ft. with the aid of an electric motor for the purpose of condensing the vapours of Turpentine Oil, it cannot be said that the said goods were being manufactured without the aid of power. He accordingly held that the assessee was liable to pay Central Excise duty at the aforesaid rate.

4. Being aggrieved, the assessee preferred appeal to the Commissioner of Customs and Central Excise (Appeals). The Commissioner (Appeals), affirmed the view taken by the Deputy Commissioner, observing that the