Tariff Entries - Rules of interpretation always subject to context and not binding commands on iron cast imperatives - SC
A Larger Bench of the Supreme Court yesterday considered the question whether the Rules for the Interpretation of Schedule to the Central Excise Tariff Act would apply to the interpretation of an entry in a notification.
In Maestro Motors, the Supreme Court had elucidated that one has to examine the notification and then refer to serial number of the notification and the item number in the first schedule of the Act and if they are identical and pari materia, rules of interpretation will apply.
The Supreme Court in the present case held that Rules of interpretation may not be applicable if the notification commands and require a different understanding. It needs no special emphasis to state that rules or principles of interpretation are always subject to context and not binding commands on iron cast imperatives.
The main issue before the Supreme Court was whether the car air-conditioning kit & the compressor manufactured by the assessee would be classified as a complete air-conditioner.
This case, as they say, had a chequered history. In 2003, the Supreme Court held in favour of the assessee and allowed the benefit claimed in an exemption notification. The Tribunal followed the order of the Supreme Court and allowed the benefit to the assessee for the subsequent period. Aggrieved Revenue again appealed to the Supreme Court and this time pleaded that the earlier order of the Supreme Court required reconsideration. So, the matter was referred to a Larger Bench and yesterday the Larger Bench delivered its verdict confirming the earlier order of the Division Bench.
The period involved in this case (the second round) was from 1.8.1991 to 28.2.1993. The Tribunal gave its order in 2003. Revenue appealed to Supreme Court in 2003 with the usual application for condonation of delay. The Apex Court decided the case yesterday. The original issue started with a Show Cause Notice in 1990 which was settled in favour of the assessee in Supreme Court in 2003.
Government should not be a compulsive litigant. In this case, the Government should have gracefully accepted the Supreme Court decision of 2003 instead of appealing to the Supreme Court against the same assessee on the same issue (for a subsequent period) and pleading that the Supreme Court judgement required reconsideration. Every litigant feels that the decision against him is wrong and requires reconsideration.
We bring you the order of the Supreme Court today. Please see Breaking News.