Case Law Details
Commissioner of Central Excise, Nagpur Vs Gurukripa Resins Private Limited (Supreme Court of India)- Excise – Indirect Tax – Central Excise Tariff Act, 1985 – Assessee, engaged in the manufacture and clearance of ‘Rosin’ and ‘Turpentine Oil’, classified their finished goods i.e. ‘Rosin’ under heading 3806.19 of the Tariff and ‘Turpentine Oil’ under heading 3805.19 of the Tariff – 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 was ordinarily carried on with the aid of power’, attracting rate of duty @ 16% on the ground that the water being an important input for the manufacturing process of ‘Rosin’ and ‘Turpentine Oil’, its further lifting up to the height of 30 ft. with the aid of an electric motor for the purpose of condensing the vapours of Turpentine Oil, cannot be said that the goods were being manufactured without the aid of the power – On appeal, Commissioner affirmed the view taken by the Deputy Commissioner – Tribunal allowed the appeal filed against said order relying on the clarification issued by the Ministry of Finance letter No. B-36/11/77-TRU dt. 10.01.1978 wherein it was clarified that so long as the use of power was limited to drawing water into a cooling tank through which condensation coils pass, manufacture of Rosin cannot be said to be with the aid of power – Hence, the instant appeal – Whether or not the process of lifting of water with the use of power, constitutes a process in or in relation to manufacture of goods, viz. ‘Rosin’ and ‘Turpentine Oil’, with the aid of power? – Held, without the process of condensation of vapours, the final products i.e. ‘Turpentine Oil’ and ‘Rosin’ cannot be manufactured – Similarly, without lifting water from the storage tanks at the ground level with the aid of electric motor to a higher level, the water cannot fall on the cooling coils with its gravitational force – Hence, operation of lifting of the water from the well to the higher levels, was so integrally connected with the manufacture of ‘Turpentine Oil’ and ‘Rosin’, that without this activity it is impossible to manufacture the said goods – Therefore, the processing of the said raw material in or in relation to manufacture of the said final goods was carried on with the aid of power – Impugned order set aside – Revenue’s appeal allowed.
Supreme Court decision prevails over Board Circular: 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.
Commissioner of Central Excise, Vs. M/s. Gurukripa Resins Pvt. Ltd.
Decided On 11 July, 2011
Decided by – Supreme Court Of India
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