TMI Blog2002 (1) TMI 73X X X X Extracts X X X X X X X X Extracts X X X X ..... d petitioner is the Vice President (Finance) of the first Petitioner/Company. 3.The petitioners have coal fired boiler for generating steam in their factory at Shahad. The steam generated in the said boiler is used in the manufacture of excisable goods. The petitioners purchase coal, classifiable under Chapter 27, and use it in the generation of the said steam. During the generation of the said steam, coal ash (cinder) emerges by way of waste product. 3.The petitioners cleared such cinder as waste without payment of duty, in view of the decision of the Board holding that the cinder is not excisable and that cinder obtained while burning coal in the boiler does not amount to manufacture within the meaning of the Act, even if it is sold for a consideration. 4.The 1st respondent, in exercise of powers conferred upon it under erstwhile Rule (8) of the Rules, had also issued Notification dated 10-2-1976, being Notification No. 76 of 1986 in tune with the view taken by the Tribunal, exempting inter alia cinder from the payment of duty. Notwithstanding the view of the Tribunal that cinder obtained by burning coal in boiler did not constitute manufacture, by subsequent another Notifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 09(2) of the Rules 1944. 8.The 2nd respondent was also called upon to show cause as to why personal penalty under Rule 210 be not imposed on him, for having committed breach of the provisions of the Act and the Rules. The charge of the said show cause-cum-demand notice was that the cinder being excisable item was liable to duty at the rate of 10 per cent from 23rd July, 1996 to 28th March, 1997 and at the rate of 8 per cent from 1st March, 1997 onwards. The petitioners replied to the said show cause notice dated 10th August, 1998 vide their reply dated 5th September, 1998, contending therein that cinder cannot be treated as excisable item under the Act. 9.In the submission of the petitioners, the clarification issued by the Board dated 7th April, 1998, on the basis of which cinder is being treated as an excisable commodity, is ultra vires the provisions of the Act, as such the same is liable to be declared as bad and illegal and subsequent show cause notice dated 10th August, 1998 is also liable to be quashed and set aside being without jurisdiction and without authority of law. The petitioners have, therefore, invoked writ jurisdiction of this Court under Article 226 of the Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dismissed in contrast to the dismissal of appeal provided under Article 133. The contention is that when Special Leave Petition is dismissed, the Supreme Court does not comment on the correctness or otherwise of the order from which leave to appeal was sought. It only shows that the Supreme Court does not consider it to be a fit case for exercise of its jurisdiction under Article 136 of the Constitution. But when the appeal provided by statute is dismissed, the doctrine of merger applies, even though dismissed by a non speaking order. In such cases, the Supreme Court upholds the decision of the High Court or Tribunal from which the appeal is provided under Clause (3) of Article 133. This doctrine of merger does not apply in case of dismissal of Special Leave Petition under Article 136 of the Constitution. The learned Counsel placed reliance on the judgment of the Supreme Court in the case of V.M. Salgaoncar v. CIT etc. reported in 2000 (243) ITR 383 in support of his submission. 14.The next submission was pressed into service, based on the principle uniformly followed in judgment rendered by the High Courts and the Supreme Courts under the Income Tax Act is that while interpretin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terim relief in favour of the petitioners. The circular issued by the CBEC/Board would be very much binding on the Appellate Authority exercising jurisdiction under the Act with the result, right up to Tribunal the petitioners may not get any relief. He, therefore, contended that considering the peculiar position in which petitioners are placed vis-a-vis their competitors from other part of the country, this Court should not refuse to consider their case on merits. The Issues : 18.The crux of the issue is as under : Whether in the facts and circumstances of the case and considering the legal position prevailing as on date, the respondents should be permitted to proceed with pursuant to or in implementation of or in furtherance of the circular of the Board dated 7th April, 1998 and to act upon consequent show cause notice dated 10th August, 1998. CONSIDERATION 19.At the outset, we wish to emphasise that no positive statement has been made or material is produced before us to show that S.L.P. has been admitted and pending in the Supreme Court from the judgment of the Gujarat High Court in the case of Ahmedabad Electricity Co. Ltd. (cited supra). In our opinion mere filing o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... non-speaking order does not justify any inference that, by necessary implication, the contentions raised in the Special Leave Petition on the merits of the case have been rejected by the Supreme Court. It has been further held that the effect of a speaking order of dismissal of a Special Leave Petition without anything more indicating the grounds or reasons of its dismissal must, by necessary implication, be taken to be that the Supreme Court had decided only that it was not a fit case where special leave should be granted. In Union of India v. All India Services Pensioners Association - AIR 1988 SC 501, this Court has given reasons for dismissing the special leave petition. When such reasons are given, the decision becomes one which attracts Article 141 of the Constitution which provides that the law declared by the Supreme Court shall be binding on all the Courts within the territory of India. It, therefore, follows that when no reason is given, but a Special Leave Petition is dismissed simpliciter, it cannot be said that there has been a declaration of law by this Court under Article 141 of the Constitution." The 3 Judge Bench of the Supreme Court in the case of Kunhuammed v. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eal under Article 133 of the Constitution of India without reasons or by non-speaking order would result in superseding the decision under appeal attracting doctrine of merger and the same principle of law holds good to the appeals provided under the statute. (ii) The judgment rendered by the High Court while interpreting a central statute is binding on the authorities created under the Act unless there is a differing judgment or view of the jurisdictional High Court or Supreme Court. (iii) The Adjudicatory and Appellate Authorities under the Act are bound to respect the judgment of the CEGAT/Tribunal, it being judicial authority and also by way of judicial discipline. (iv) In the event of contest, between binding judgment of CEGAT/Tribunal and binding Circular of the CBEC/Board the latter must yield. Application of principles to this case Finding : 22.Turning to the facts of the present case, the Board vide its Circular No. 386/19/98-CX, dated 7th April, 1998 had declared that cinder is an excisable commodity classifiable under Heading No. 2621 and is chargeable to appropriate rate of duty . The said circular cannot be held to be legal and valid. CEG ..... X X X X Extracts X X X X X X X X Extracts X X X X
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