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2020 (9) TMI 448 - AT - Customs100% EOU - clearance of cotton waste to domestic tariff area - Benefit of N/N. 1/95-CE dated 4th January 1995 and N/N. 22/03-CE dated 31st March 2003 pertaining to domestic procurement of raw materials and consumables - Benefit of N/N. 53/97-Cus dated 3rd June 1997 and no. 52/03-Cus dated 31st March 2003 - whether payment of excise duty at nil rate on clearance of cotton waste to domestic tariff area (DTA) in manner as prescribed by EXIM Policy, would be covered by the phrase “on payment of appropriate duty of excise” used in these exemption notifications, making appellants entitled to the benefit of these exemption notifications or otherwise? HELD THAT:- Admittedly revenue had earlier issued a Circular in 1995 clarifying that “appropriate rate of duty” will include the “nil” rate of duty. Hence the view was that though Supreme Court had decided the issue, holding that “appropriate rate of duty” will not include the case of payment of duty at “nil” rate, but in view of Circular/ clarification issued, the interpretation made in circular will be binding on the revenue authorities. However this view was not concurred by the Hon’ble Supreme Court and in case of Kalyani Packaging [2004 (5) TMI 78 - SUPREME COURT], Hon’ble Supreme Court held that cases where benefits has been granted, cases should not be reopened. Otherwise Courts/Tribunals can not ignore a judgment of this Court and follow circulars of the Board - The decision of Kalyani Packaging was affirmed by the five member bench of Hon’ble Supreme Court in case of Rattan Wire and Melting [2008 (10) TMI 5 - SUPREME COURT]. Five Member bench of Hon’ble Supreme Court has in case Dilip Kumar & Co [2018 (7) TMI 1826 - SUPREME COURT ] settled the law in favour of strict interpretation of exemption notification and resolution of ambiguity in the interpretation of notification if any in favour of revenue. Thus, we are not in position to agree with the decision rendered by the Mumbai Bench of CESTAT, in case of M/S. TECHNOCRAFT INDUSTRIES (I) LTD VERSUS COMMISSIONER OF CENTRAL EXCISE, THANE I [2019 (8) TMI 719 - CESTAT MUMBAI], relied upon by the counsels for Appellant - In view of the decision of Hon’ble Apex Court in case of Sant Lal Gupta & Ors. [2010 (10) TMI 194 - SUPREME COURT] and Hon’ble Bombay High Court in case of Mercedes Benz India (P) Ltd. v. UOI, [2010 (3) TMI 300 - BOMBAY HIGH COURT] the matter needs to be referred to the President for constitution of a larger Bench for consideration of the issue. The matter is referred to Learned President, for being placed before Larger Bench of Tribunal the following questions for consideration: a. Whether the term “appropriate rate of duty” used in the exemption notifications 1/95-CE dated 4th January 1995 and no. 22/03-CE dated 31st March 2003 pertaining to domestic procurement of raw materials and consumables and notification no. 53/97-Cus dated 3rd June 1997 and no. 52/03-Cus dated 31st March 2003, will cover the case where the finished goods are cleared on payment of duty at nil rate? b. Whether the CESTAT Mumbai in case of Technocraft Industries, was correct in holding that the benefit of these exemption notifications shall be admissible even when the finished goods are cleared on payment of duty at ‘nil’ rate?
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