IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.N.RAVINDRAN TUESDAY, THE 10TH NOVEMBER 2009 / 19TH KARTHIKA 1931 WP(C).No. 16810 of 2009(U) ----------------------------------------- PETITIONER(S): ------------------------ M/S. MARICO LIMITED, NEW INDUSTRIAL DEVELOPMENT AREA, MENON PARA ROAD, KANJIKODE, PALAKKAD DISTRICT, KERALA -678 621, REPRESENTED BY ITS WORKS HEAD, MR. BHASKAR BALAKRISHNAN. BY ADVS. MR.JOSEPH KODIANTHARA, MR.TERRY V.JAMES. RESPONDENT(S): --------------------------- 1. UNION OF INDIA, THROUGH THE SECRETARY, MINISTRY OF FINANCE, DEPARTMENT OF REVENUE, GOVERNMENT OF INDIA HAVING ITS OFFICE AT NORTH BLOCK, NEW DELHI - 110 001. 2. THE CENTRAL BOARD OF EXCISE & CUSTOMS, A STATUTORY BODY CONSTITUTED UNDER THE CENTRAL BOARD OF REVENUES ACT, 1963 HAVING ITS OFFICE AT NORTH BLOCK, NEW DELHI - 110 001. 3. THE COMMISSIONER OF CENTRAL EXCISE AND CUSTOMS, HAVING ITS OFFICE AT C.R. BUILIDNGS, MANANCHRA, CALICUT - 673 001. 4. ASST. COMMISSIONER OF CENTRAL EXCISE AND CUSTOMS, PALAKKAD-II, HAVING HIS OFFICE AT METTUPALAYAM STREET, PALAKKAD -678 001. 5. SUPERINTENDENT OF CENTRAL EXCISE, PALAKKAD I D RANGE, HAVING HIS OFFICE AT METTUPALAYAM STREET, PALAKKAD - 678 001. R1 TO R5 BY ADV. MR.ABRAHAM THOMAS, CENTRAL BOARD OF EXCISE & CUSTOMS THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 10/11/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: Kss WPC.NO.16810/2009 U APPENDIX PETITIONER'S EXHIBITS: P1: COPY OF LICENCE ISSUED UNDER THE PREVENTION OF FOOD ADMINISTRATION RULES 1955. P2: COPY OF THE DECLARATION DTD. 15/04/2009 FILED BY THE PETITIONER WITH THE CENTRAL EXCISE AUTHORITIES. P3: COPY OF NOTIFICATION NO.3/2006 DTD. 1/03/2006. P4: COPY OF RELEVANT PORTION OF EXPLANATORY NOTES OF HEADING 15 OF HSN. P5: COPY OF RELEVANT PORTION OF EXPLANATORY NOTES TO HEADING 33 OF HSN. P6: COPY OF CIRCULAR DTD. 31/08/1995. P7(A): COPY OF JUDGMENT REPORTED IN 2007 (210)ELT 360 OF TRIBUNAL, MUMBAI IN THE CASE OF AMARDAS PLASTIC INDUSTRIES. P7(B): COPY OF JUDGMENT REPORTED IN 2009 (235) ELT 544 OF TRIBUNAL CHENNAI IN THE CASE OF AISHWARY INDUSTRIES. P8: COPY OF ORDER DTD. 3/06/2009 OF THE BOARD. P9: COPY OF LETTER DTD. 8/06/2009 FROM THE 4TH RESPONDENT TO THE PETITIONER. P10: COPY OF PETITIONER'S LETTER DTD. 9/06/2009 TO THE 4TH RESPONDENT. P10(A):COPY OF LETTER DTD. 13/06/2009 FROM THE 4TH RESPONDENT TO THE PETITIONER. P10(B):COPY OF SHOW CAUSE NOTICE NO.23/2009 (C.NO.V/33/15/17/09 Cs.Adj) DTD. 3/07/2009 ISSUED BY THE COMMISSIONER OF CENTRAL EXCISE, CALICUT. P11: COPY OF STATEMENT OF OBJECTS AND REASONS TO THE CENTRAL EXCISE TARIFF (AMENDMENT) BILL 2004. RESPONDENT'S EXHIBITS: N I L /TRUE COPY/ P.A.TO JUDGE Kss P.N.RAVINDRAN, J. --------------------------- W.P.(C) No. 16810 OF 2009 -------------------------- Dated this the 10th day of November, 2009 J U D G M E N T Heard Sri. Joseph Kodianthara, the learned counsel appearing for the petitioner and Sri.Abraham Thomas, the learned standing counsel appearing for the Central Board of Excise and Customs. 2. The petitioner is a manufacturer of coconut oil packed and sold in containers up to 200 ml. In this writ petition the petitioner challenges Ext.P8 circular issued by the Central Board of Excise and Customs, Ext.P9 letter issued by the Assistant Commissioner of Central Excise, Palakkad and Ext.P10(b) show cause notice issued by the Commissioner of Central Excise, Customs and Service Tax, Calicut calling upon the petitioner to show cause why Central Excise duty should not be imposed on them along with penalty and interest. The petitioner challenges Exts.P8, P9 and P10(b) on the ground that in view of the binding decision of the Customs Excise and Service Tax Appellate Tribunal, a copy of which is on record as Ext.P7(b), the coconut oil in W.P.(C) No. 16810/09 2 containers up to 200 ml manufactured by them is not chargeable with excise duty. The respondents have filed a statement contending inter alia that the department has filed Civil Appeal No.16595 of 2009 in the Apex Court from Ext.P7(b) judgment , that the said appeal has been admitted and that it stands posted for hearing along with other connected appeals. The learned standing counsel appearing for the respondents submits that as Ext.P7(b) judgment has not attained finality, the respondents are entitled to levy and collect excise duty on the goods in question manufactured by the petitioner. 3. A reading of Ext.P7(b) order indicates that coconut oil packed and sold in packages of capacity up to 500 ml is not liable to be charged with excise duty. The High Court of Gujarat has in Raymon Glues & Chemicals v. Union Of Inida (2000 (117) ELT 29) held that circulars and departmental clarifications issued by the department cannot operate when the field is occupied by a decision rendered by the appellate tribunal. A similar view has been taken by the High Court of Bombay in Century Rayon v. Union of Inida (2002 (142) 319). In the light of the said decisions, with which I am in respectful agreement, the respondents cannot take the stand that W.P.(C) No. 16810/09 3 they are entitled to depart from the stand taken by the Tribunal in Ext.P7(b)order. Further, the Apex Court has not stayed the operation of the order of the Tribunal. In such circumstances, I am persuaded to hold that the petitioner cannot be called upon to pay excise duty on the goods manufactured by them falling within the ambit of Ex.P7(b) order. I accordingly dispose of this writ petition with a direction that rights of parties will be governed by Ext.P7(b) order subject to the outcome of the appeals filed by the department in the Apex Court. In the event of the Apex Court reversing the judgment, the rights of parties will be governed by the law laid down by the Apex Court. P.N.RAVINDRAN, JUDGE vps