2008 INSC 1736
                                    SUPREME COURT OF INDIA

                                     M/s. Sandur Micro Circuits Ltd.

                                                      Vs.

                              Commissioner of Central Excise, Belgaum

                                           C.A.No.7177 of 2005

                        (Dr. Arijit Pasayat and Dr. Mukundakam Sharma JJ.)

                                                  13.08.2008

                                                JUDGMENT

Dr. Arijit Pasayat, J.

1. Leave granted in SLP (C) Nos. 16719 of 2006 and 16947 of 2006.

2. In all these appeals common questions are involved and are directed against the judgment
and final order passed by the Customs, Excise and Service Tax Appellate Tribunal (in short
the `Tribunal). Since in appeals filed by the appellants common question of law is involved,
there is no need to elaborately deal with the factual aspects. Question is the effect of a
circular issued by Central Board of Excise and Custom (in short the `Board') i.e. Circular No.
42 of 1997 dated 19.9.1997. The CESTAT held that the Notification No.2/95-CE dated
4.1.1995 as amended by Notifications Nos. 21/97-CE dated 11.4.1997, 100/95-CE dated
2.6.1995 and 7/96-CE dated 1.7.1996 shall have overriding effect over the Circular. It held
that there is no manner of doubt that the appellant's claim of liability to pay 50% of the
aggregated customs duty on the goods cleared to the Domestic Tariff Area (in short the
`DTA') is not legally tenable. It was held that the Circular was in direct conflict with the
Notification No. 2/95.

3. Learned counsel for the appellant in each case submitted that the Circular was issued on
the basis of representations made by various assessees and therefore the Notification cannot
stand on the way of relief being granted.

4. Learned counsel for the respondent on the other hand submitted that the Notification
which is statutorily issued has overriding effect because the Notifications are issued in
exercise of powers conferred by sub-section (1) of Section 5A of the Central Excises and
Salt Act, 1944 (in short the `Act').

5. The issue relating to effectiveness of a Circular contrary to a Notification statutorily issued
has been examined by this Court in several cases. A Circular cannot take away the effect of
Notifications statutorily issued. In fact in certain cases it has been held that the Circular

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cannot whittle down the Exemption Notification and restrict the scope of the
Exemption Notification or hit it down. In other words it was held that by issuing a circular a
new condition thereby restricting the scope of the exemption or restricting or whittling it
down cannot be imposed. The principle is applicable to the instant cases also, though the
controversy is of different nature.

6. The appeals fail and are dismissed.

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