Per Shri V.P. Gulati :

The issue in the appeal relates to the benefit of notification No. 184/86 dated 1.3.86. Under this notification the goods which are manufactured by the specified units for supply to the Ministry of Defence are exempted from payment of duty. The appellants do not figure in the list of the manufacturers specified in the said notification.

2. The Ld. advocate for the appellants has pleaded that the appellants are only the job workers for M/s. Bharat Electronics Ltd., (M/s. BEL) who figure in the list of manufacturers set out in the notification. He has pleaded that under the representation being made by M/s. BEL that the goods manufactured by the ancillary of BEL should also be given benefit of the notification the Chairman of the Central Board of Customs & Central Excise vide his letter No. F.No. 213/18/91-CX.6 dated 27.6.92 addressed to Shri M.V. Reddy, then the Collector of Central Excise with a copy to the Vice President of BEL, has clarified the position in para 2 & 3 of his letter as under :-

"2. The purpose of Notification 184 of 86, manufactured by the five units listed in the said Notification, which are mainly engaged in production and supply of goods to the Ministry of Defence for official purposes, is very clear. When goods are manufactured by other ancillary units and sub-contractors for this purpose, and are sent back to the five units for further processing, fitting, manufacture etc. and for eventual clearance from the five main units, there is absolutely no reason for denying them the benefit of this exemption notification. You may, therefore, immediately finalise all pending cases on this basis and later send me a report as to the background factors leading to this problem so as to examine methods to ensure that such unnecessary problems are not created in future.

3. The position will of course be different if any of the job workers are clearing the goods directly from their units for excise purposes on a principal to principal basis and are not returning the goods for eventual clearance to any of the five units named in the notification."

3. He has also pleaded that these instructions of the Chairman have been acted upon in other cases and the demands have been dropped. He has therefore pleaded that in the light of these instructions, the matter may be looked into afresh by the authorities below. He has pleaded that this letter was not cited before the Ld. Lower authority when the order was passed.

4. The Ld. JDR for the department has no instructions as to the applicability of this letter. He has pleaded the status of this letter also will be required to be considered as this letter has been issued by the Chairman and whether the same could be construed as the instructions of the Board.

5. We have considered the pleas made by both the sides. We observe that as per the notification the goods as manufactured for defence purposes by the specified manufacturers alone are exempted from payment of duty. The plea of the appellants is that the goods manufactured by them were for supply to the BEL who ultimately supplied the goods to the Ministry of Defence. This position, we are informed, is not in dispute. We have been informed by the Ld. advocate that these instructions given by the Chairman has been acted upon and demands in other cases have been dropped.

6. We observe that the letter addressed by the Chairman is not in the name of the Board and he has issued the letter in his capacity as the Chairman of the Board. The status of this letter will be required to be examined for his binding nature. In the case of CC Vs. Usha Motor Industries reported in 1997 (22) RLT 221 (S.C.) = 1997 (94) ELT 460 (SC), the Hon'ble Supreme Court has held in the case of the instructions by the Board, the authorities below would be bound by the same.

7. We are not aware of the back ground in which the Chairman had issued the letter and whether he had the concurrence of the Board, who are the statutory authority under t