- (1.) The writ petitioner had challenged Customs Circular dated 27th June, 2002 regarding Levy of Special Additional Duty (SAD) on goods chargeable to duty under Additional Duties of Excise (Goods of Special Importance) Act, 1957. The circular appears to have been issued upon examination of the judgment of the Supreme Court in the case of Collector of Central Excise, Vadodara Versus Dhiren Chemical Industries, 2002 139 ELT 3 (SC). The effect of the circular is that the goods which have not suffered any additional excise duty leviable under the Additional Excise Duty (Goods of Special Importance) Act, 1957 would be levied with special additional duty.
(2.) This circular was challenged by a writ petition and decided in the case of Nikhil Kumar Versus Commissioner of Customs, 2005 187 ELT 6 (Cal.) By that decision the circular was upheld and the judgment was in favour of the revenue. Paragraphs 8 and 11 of the said judgment are reproduced below:- "8. From the above it will appear the pivotal issue involved in this case is whether the Circular of the Board questioned here, has been issued contrary to the provision of sub-Section 5 of Section 3A of the said Tariff Act or not. The impugned Circular was issued purporting to rely on the judgment of the Constitutional Bench of the Apex Court rendered in case of Collector of Central Excise, Vadodara v. Dhiren Chemical, 2002 139 ELT 3 (SC). So it is apposite to examine the exact ratio of this judgment. In my view this judgment was rendered on the fact that fresh re-rollable scrap for which the appropriate amount of excise duty had already been paid, was exempted from excise duty being charged in the event the same were used in any manufacturing process. The same nature of imported scrap was sought to be granted exemption contending that 'nil duty' is also the duty inasmuch as by a notification it was declared that the Customs duty for import of such raw materials was not liable to be levied. This contention, however, was not accepted by the Hon'ble Apex Court and it was held that the phrase used 'appropriate amount of duty' and 'has already been paid' were interpreted as actual payment and not a national payment nor 'nil payment'. It was held in that context that 'no payment' or 'nil payment' cannot be within the purview of the aforesaid exemption. 11. Therefore the interpretation given by the Board by applying the Dhiren Chemicals case is appropriate and just. If this interpretation is given otherwise while applying the apparent and literal meaning, then the petitioner would unjustly be enriched. Therefore, I do not find any force in the submission of Mr. Mehta. As such this application is dismissed."
(3.) Mr. Mehta, learned Advocate appearing on behalf of the petitioner, drew attention to Dhiren Chemical Industries in particular paragraph 9 therein which is reproduced below:- "9. We need to made it clear that, regardless of the interpretation that we have placed on the said phrase, if there are circulars which have been issued by the Central Board of Excise and Customs which place a different interpretation upon the said phrase, that interpretation will be binding upon the revenue.";