M/S. Sandur Micro Circuits Ltd vs C.C.E, Belgaum

short the `Tribunal). Since in appeals filed by the appellants

common question of law is involved, there is no need to

elaborately deal with the factual aspects. Question is the

effect of a circular issued by Central Board of Excise and

Custom (in short the `Board') i.e. Circular No. 42 of 1997

dated 19.9.1997. The CESTAT held that the Notification No.

2/95-CE dated 4.1.1995 as amended by Notifications Nos.

21/97-CE dated 11.4.1997, 100/95-CE dated 2.6.1995 and

7/96-CE dated 1.7.1996 shall have overriding effect over the

Circular. It held that there is no manner of doubt that the

appellant's claim of liability to pay 50% of the aggregated

customs duty on the goods cleared to the Domestic Tariff Area

(in short the `DTA') is not legally tenable. It was held that the

Circular was in direct conflict with the Notification No. 2/95.

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3. Learned counsel for the appellant in each case submitted

that the Circular was issued on the basis of representations

made by various assessees and therefore the Notification

cannot stand on the way of relief being granted.

4. Learned counsel for the respondent on the other hand

submitted that the Notification which is statutorily issued has

overriding effect because the Notifications are issued in

exercise of powers conferred by sub-section (1) of Section 5A

of the Central Excises and Salt Act, 1944 (in short the `Act').

5. The issue relating to effectiveness of a Circular contrary

to a Notification statutorily issued has been examined by this

Court in several cases. A Circular cannot take away the effect

of Notifications statutorily issued. In fact in certain cases it

has been held that the Circular cannot whittle down the

Exemption Notification and restrict the scope of the

Exemption Notification or hit it down. In other words it was

held that by issuing a circular a new condition thereby

restricting the scope of the exemption or restricting or

3 whittling it down cannot be imposed. The principle is

applicable to the instant cases also, though the controversy is

of different nature.

6. The appeals fail and are dismissed.

........................................J. (Dr. ARIJIT PASAYAT)

.........................................J. (Dr. MUKUNDAKAM SHARMA)

New Delhi, August 13, 2008

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