Collector of Customs vs B. Arun Kumar and Co.

This matter was admitted for hearing on two points viz (1) Whether on the facts and in the circumstances of the case the Tribunal was right in law in setting aside the order of the Collector dated 31st October, 1986 and directing refund with interest? (2) Whether on the facts and circumstances of the case the learned Tribunal was right in law in transferring the cross objection to be decided by the Special Bench of the Tribunal?

We are told by the learned Counsel for both the parties that during the pendency of the matter the Special Bench of the Tribunal has already decided the cross objection and also the separate appeal filed by the department as there has been no stay order granted by this Court. In view of the factual position point No. 2 has now become infructuous. Therefore, no decision is required to be given on this point.

After going through the entire impugned judgment and order in this matter it appears to us that the only reason to set aside order of the Collector imposing penalty was the judgment of the Supreme Court rendering decision in B. Vijay Kumar & Co. v. Collector of Central Excise and Customs reported in 1991 (33) ECR 669 (S.C.)

To make it specific we quote the reasoning of the learned Tribunal:

The above said reasonings of the Tribunal were taken into consideration by the Hon''ble Supreme Court in the case of B. Vijaykumar & Co. The Supreme Court upheld the correctness of the findings of the Tribunal with regard to the bona fide of the appellants in that case. The appellants before us also stand on the same footing. Their case is also exclusively as that of B. Vijaykumar & Co. In such circumstances that decision of the Supreme Court is applicable to the facts of the case also. But the contention of the learned junior departmental representative, Sri Jain, is to the effect that the Supreme Court had made a special observation in that case that since they have decided the matter in view of the special facts and circumstances in those cases that order will not be treated as a precedent.

It appears that after observing as above there has been no separate decision or finding rather it is mentioned by the learned Tribunal itself that in such circumstances we fail to see how relief can be denied to the appellants merely on placing reliance on the observation of the Supreme Court, that case has been decided in view of the special facts and circumstances available therein and that case will not be treated as a precedent.

We are of the view that the aforesaid reliance of learned Tribunal on the above decision of Supreme Court (supra) is legally flawed as when the Supreme Court has made it clear in the judgment itself that it would not be a binding precedent the Tribunal of its own cannot treat the same as being binding and according to us this amounts to ignoring the Supreme Court''s wishes.

Apart from the aforesaid reasoning there is no other material or reason has come up in the said order of the Collector. We, therefore, hold that the learned Tribunal ought to have come to its own and individual findings without taking into consideration of the case of B. Vijaykumar & Co. (supra). This exercise has not been done.

We, therefore, set aside the judgment and order to that extent and remand the matter for fresh hearing. Let this decision be rendered within a period of three weeks from the date of receipt of this order.

We keep all points open for both the parties and may be adjudicated before Tribunal. We have to state that the learned Tribunal should not take note of B. Vijaykumar & Co.

All parties shall act on a xerox signed copy of this judgment and order on usual undertakings.