Suchitra Components Ltd. Vs Commissioner of Central Excise (Supreme Court)
Summary: The Supreme Court in Suchitra Components Ltd. Vs Commissioner of Central Excise, Guntur considered an appeal against the final order dated 14 January 2005 passed by the Customs, Excise & Service Tax Appellate Tribunal, New Delhi, in Appeal No. E/3422/93-NB-A. The dispute concerned the date from which the assessee could be required to pay Central Excise duty in light of the application of a departmental circular. The Tribunal had directed payment of duty from 1 March 1990, whereas the assessee contended that an adverse circular could operate only prospectively. The appellant relied on the Supreme Court’s decision in Commissioner of Central Excise, Bangalore Vs Mysore Electricals Industries Ltd., 2007 (204) E.L.T. 517 (S.C.), which established the distinction between beneficial and oppressive circulars.
The Supreme Court followed the principle that a beneficial circular must be applied retrospectively, while an oppressive circular must be applied prospectively. Accordingly, when a circular operates against an assessee, the assessee is entitled to insist upon its prospective enforcement. Applying this principle, the Court held that Suchitra Components Ltd. was liable to pay duty from 29 August 1990, the date of issuance of the show cause notice, and not from 1 March 1990 as ordered by the Tribunal. The civil appeal was allowed on these terms, with no order as to costs.
Cases Discussed
- Commissioner of Central Excise, Bangalore Vs Mysore Electricals Industries Ltd. — 2007 (204) E.L.T. 517 (S.C.); Civil Appeal No. 4488 of 2005. The Supreme Court relied on this decision for the principle that beneficial circulars apply retrospectively, while oppressive circulars apply prospectively.
FULL TEXT OF THE JUDGMENT/ORDER OF SUPREME COURT
This appeal is directed against the final order no.204/05-NB-A dated 14th January, 2005 passed by the Customs, Excise & Service Tax Appellate Tribunal, New Delhi in Appeal No. E/3422/93-NB-A.
We have heard Mr. A.R. Madhav Rao, learned counsel for the appellant and Mr. K. Radhakrishna, learned Senior Counsel for the respondent. We have perused the orders passed by the lower Authorities and also of the Tribunal. The point raised by the learned counsel for the appellant is covered by the recent judgment of this Court in Civil Appeal No.4488 of 2005, Commissioner of Central Excise, 2 Bangalore versus M/s. Mysore Electricals Industries Ltd., reported in 2007 (204) E.L.T. 517. In the said Judgment, this Court held that a beneficial circular has to be applied retrospectively while oppresive circular has to be applied prospectively.
Thus, when the circular is against the assessee, they have right to claim enforcement of the same prospectively. In view of the submission made by the learned counsel for the appellant and also of the judgment of this Court in C.A. No.4484/05 (supra), the appellant is liable to pay the duty from 29.8.1990 i.e. from the date of issue of the show cause notice and not from 1.3.1990 as ordered by the Tribunal.
The Civil Appeal stands allowed on the above terms.
No costs.
