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TMI Blog2014 (12) TMI 653X X X X Extracts X X X X X X X X Extracts X X X X ..... ter themselves under his registration for the purpose of payment of duty of excise on the goods manufactured and cleared by the petitioner. 2. Few facts, which are relevant for consideration herein are as follows: The petitioner is the manufacturer and distributor of coconut oil in various sizes of package. The first respondent has, vide circular bearing No.145/56/95-CX dated 31.8.1995 classified the coconut oil packed in small containers, the same is classifiable as a fixed vegetable oil under Chapter 15 or as a cosmetic preparation under Central Excise Tariff Act, 1985. It is stated therein that the coconut oil whether pure or refined and whether packed in small or large quantities merits classification under heading No.1503 as long as it satisfies the criteria of fixed vegetable oil laid down in Chapter note 3 of Chapter 15. It further says that if the containers bear labels/literature etc. indicating that it is meant for application on hair, as specified under Note 2 of Chapter 33 and/or if the coconut oil has additives (other than BHA) or has undergone processes which make it a preparation for use on hair as mentioned in Chapter Note 6 of Chapter 33, then the coconut oil may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is contended that Section 37B cannot be used to interfere with the exercise of quasi judicial power of adjudication. The learned counsel for the petitioner, in support of such contention, relied on the following decisions: (i) Pioneer Miyagi Chemicals 2000 (116) ELT 441 (Mad); (ii) Faridabad Iron and Steel Traders Association 2004 (178) ELT 1099 (Del); (iii) Sarabai Chemicals 1995 (76) ELT 34 (Guj) and (iv) Marico Industries 2012 (282) ELT 180 (Ker). 6. It is also contended that in view of the decisions of the Tribunal on earlier occasions, the classification made by the impugned circular on the basis of the packing of the coconut oil is not correct. It is further argued that the impugned circular, apart from being bad for want of jurisdiction the classification on the basis of packing, results in hostile discrimination of identical goods in violation of the equality clause in Article 14, besides, failing to satisfy the twin tests laid down by the Hon'ble Supreme Court. It is sought to be argued on the side of the petitioner that the classification on the basis of packing has no nexus to the object sought to be achieved and when the law making authority has not chosen t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or put up in a form clearly specialised to such use and includes products whether or not they contain subsidiary pharmaceutical or antiseptic constituents or are held out as having subsidiary curative or prophylactic value." After amendment with effect from 1.3.2005: "Headings 33.03 to 33.07 apply, inter alia, to products, whether or not mixed (other than aqueous distillates and aqueous solutions of essential oils), suitable for use as goods of these headings and put up in packings of a kind sold by retail for such use." The reading of Chapter Note 2 of Chapter 33 before and after amendment as extracted above, would undoubtedly go to show that before amendment, the coconut oil was treated as suitable for use as fixed vegetable oil or as cosmetics not depending upon the packing but on the labels, literature or other indications that they are for use as cosmetics or toilet preparations or put up in a form clearly specialised to such use. Whereas, the same was, as per the subsequent amendment, revised by solely depending upon the packing. 11. The first ground of attack against the validity of the impugned circular is that the impugned circular is in excessive exercise of jurisdic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that, the first respondent has neither the authority nor jurisdiction to issue the circular which runs counter to the judicial pronouncements. 12. Similar view was also expressed in yet another judgment cited on the side of the petitioner in Faridabad Iron and Steel Traders Association v. Union of India 2004 (178) ELT 1099 (Del), wherein, the Delhi High court was of the view that according to the spirit of Section 37B, circulars or directions can be issued in order to achieve the object of uniformity and to avoid discrimination and such circulars bind the officers only when they act in their administrative capacity and the quasi judicial functions cannot be controlled by executive actions by issuing circulars. The Delhi High Court has gone to the extent of saying that the Board's circulars instructions or directions cannot in any manner interfere with quasi judicial powers of the Assessing Officers and the officials exercising quasi judicial powers must ignore any circular or direction interfering with their quasi judicial functions. It is also observed therein that when any authority is conferred with the power to determine certain question in judicial and/or quasi judicial m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh Courts in the decisions as referred to above, would make it clear that the nature of the orders, instructions, directions issued under section 37B is only for limited purpose and while doing so, it cannot over ride or nullify or get over the decision of the Tribunal, by exercising any appeal power or indulged in legislating. 14.The learned counsel for the petitioner would at this juncture draw the attention of this court to the decisions rendered by the Tribunal, one of which is confirmed by the Hon'ble Apex court regarding the same classification issue and would argue that the impugned circular intends to get over the Tribunal decision and is hence without jurisdiction and is bad in law: (i)Final order no.638/08 dated 25.6.2008 in M/s.Madhan Agro Industries (P) Limited case, decided by the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Chennai (CESTAT, SZB, Chennai); (ii)Aishwarya Industries, Pondicherry 2008 TIOL- 2846 -CESTAT-Mad (iii)Capital Technologies Limited and others v. Commissioner of Central Excise and Service Tax, Tirupathy, 2011-TIOL-775-CESTAT, Bangalore as confirmed by the Hon'ble Supreme court by dismissing the appeal; (iv)M/s.Ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vidence was produced on the side of the Revenue that the products are not represented to market as edible grade coconut oil. The Tribunal, on the basis of such findings as referred to above and following the judicial pronouncement on identical issue in M/s.Madhan Agro Industries (P) Ltd, was inclined to hold that the impugned order was not sustainable and accordingly set aside the same. When the correctness of the same was challenged before the Hon'ble Supreme Court, the Apex court, after condoning the delay in filing the appeal, dismissed the appeal, thereby confirming the order of the Tribunal. 17. As rightly argued by the learned counsel for the petitioner, the respective Tribunals in the decisions referred to above are of the view that coconut oil is excluded from the purview of Chapter Note 2 of Chapter 33 and the same falls under Chapter 15 in the absence of any indication to show that it is meant for the use as cosmetics and irrespective of packings and the first respondent has no jurisdiction to issue circular, which has the effect of nullifying the decisions rendered by the Tribunal. The learned counsel for the petitioner also cited another decision in Shalimar Chemic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rfere and that, a legal enactment must be interpreted in its plain and literal sense as that is the first principle of interpretation etc. However, the same are not applicable to the facts of the present case, wherein, the issue involved relates to reclassification on the basis of the quantum of packing that too by way of circular issued by the first respondent, as such, the judgments cited on the respondents side are inapplicable to the facts of the present case. In the judgment passed by learned sister judge of this Court in Kaleesuwari Refinery Pvt. Ltd case, the attention of the learned sister judge was not drawn to the decisions rendered by the respective Tribunals regarding classification already issued and the same led to the judgment against the assessee. This court is of the view that as it has been consistently held that as the power under section 37B cannot be used to interfere with the exercise of quasi judicial power of adjudication and as the impugned circular is contrary to well settled principles, the impugned circular is bad for want of jurisdiction. 19. Other grounds on which the impugned circular is sought to be challenged are that (i) it is hostile discriminati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the contention raised on the side of the petitioner that coconut oil in such small packs being purchased by poor people both for personal and domestic use, the nature of the use favourable to the assessee to be adopted in preference to other use as held by Gauhati High court in Shalimar Chemical Works Ltd case. At the risk of repetition, it is stated that the small packs, having been mainly meant for economically poor and down trodden, the presumption that it is used as cosmetics than as edible oil, has no rhyme, reason or logic in the same. By doing so, the poor purchaser of small packs are burdened by levying additional service tax. 22. As far as the ground regarding twin tests is concerned, the Hon'ble Apex court has laid down that the validity of the classification has to satisfy two tests viz.,(i) classification must be founded on an intelligible differential which distinguishes persons or things that are grouped together from others left out of the group; (ii) that the differential must have a rational relation to the object sought to be achieved by the statute in question. However, this court does not find any rational between the classification made and the object so ..... X X X X Extracts X X X X X X X X Extracts X X X X
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