SARLA PERFORMANCE FIBERS LIMITED ETC.versusCOMMISSIONER OF CENTRAL EXCISE, SURAT-II

                         [2016] 7 S.C:R. 201


        SARLA PERFORMANCE FIBERS LIMITED ETC.                             A
                                  v.
      COMMISSIONER OF CENTRAL EXCISE, SURAT -II
                (Civil Appeal Nos. 3555-3560of2012)
                           JUNE 03, 2016                                  B

       [DIPAK MISRA AND SHIVA KIRT! SINGH, JJ.]
       Central Excise Act, 1944: s. 3 (1) and its proviso -
Chargeability under s.3(1) or under proviso of 3(1) - Assessee, a
100% Export Oriented Unit - Clearance of goods without
permission of Development Commissioner - Held: Duty is,payable
                                                                          c
uls.3(1) of the Act - If goods are not allowed to be sold in India, the
proviso to s.3(1) shall not be applicable.
      Allowing the appeals, the Court
      HELD: The expression "allowed to be sold in India" used             D
in proviso to Section 3(1) of the Act would be applicable only to
sales made in DTA of the production by 100% EOUs, which are
allowed to be sold into India as per the provisions of the Exim
Policy. (Para 35] (221-G-H]
      SIV Industries Ltd. v. CCE & Customs 2000 (2) SCR                   E
      231 : (2000) 3 SCC 367; CCE v. NCC Blue Water
      Products Ltd. 2010 (11) SCR 741 : 2010 (258) ELT
      161 - relied on.
      J.K. Synthetics Ltd. v. Collector of Central Excise 1996
      (86) ELT 472 (SC); Shrichakra Tyres Ltd. .v. CCE                    F
      Madras 1999 (108) ELT 61 (T); Sterlite Optical
      Technologies Ltd. v. CC&CE Aurangabad 2005 (188)
      ELT 201 (T); CCE Delhi v. Mis. Maruti Udyog Ltd.
      2002 (141) ELT 3 (SC); Himalaya. International Ltd. v.
      Commissioner of C.Ex. Chandigarh (2003) 154 ELT
    , 580 - referred to.                                                  G
                        Case Law Reference
1996 (86) ELT 472 (SC)           referred to             Para6
2000 (2) SCR 231                 relied on               Para8
                                                                          H
                                 201
202            SUPREME COURT REPORTS                        [2016] 7 S.C.R.


A     1999 (108) ELT 61 (T)           referred to              Paras
      2005 (188) ELT 201 (T)          referred to              Para9
      2002 (141) ELT 3 (SC)           referred to              Para 12
      2010 (11) SCR 741                relied on               Para 14
B     (2003) 154 ELT 580               referred to             Para 19
           CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 3555-
      3560of2012.
            From the Judgment and Order Nos. M/2113/WZB/AHD/2010,
      M/2114/WZB/AHD/2010, M/2115/WZB/AHD/2010, M/2116/WZB/
c     AHD/2010, M/2117/WZB/AHD/2010, M/2119 /WZB/AHD/2010,
      passed in Appeal Nos. E/2806/02, E/2807/02, E/2808/02, E/2809/02,
      E/2810 and E/2812/02 dated 16.12.20 I 0 of the Customs, Excise and
      Service Tax Appellate Tribunal, West Zonal Bench, Ahmedabad.
            S. K. Bagaria, Sr. Adv., Rohan P. Shah, Rohit Jain, Alok Yadav,
D
      Dhruv Bhattacharya, UditJain, Praveen Kumar, K. Ajit Singh, V. Lakshmi
      Kumaran, Jay Savla, S. Vasudevan, Ms. Renuka Sahu, Advs. for the
      Appellant.
            K. Radhakrishnan, A. K. Panda, Sr. Advs., Ms. Nisha Bagchi,
      Arjit Prasad, Ms. Pooja Sharma, B. Krishna Prasad, Praveen Kumar,
E     Advs. for the Respondent.
            The Judgment of the Court was delivered by
             DIPAK MISRA, J. I. The appellant is a company registered
      under the Companies Act, 1956 and is engaged, inter alia, in the
F     manufacture of excisable goods, namely, synthetic yam and for that
      purpose it has a factory at Unit-I, Survey No. 59/1/14, Amii, Piparia
      Industrial Estate, Silvassa (U.T. ofD.N.&H). The said factory is a I 00%
      Export Oriented Unit (EOU). Prior to 61h November, 2006, Sarla
      Performance Fibers Limited was known as Sarla Polyesters Ltd. Shri
      Madhusudan Jhunjhunwala and Shri Satish Kumar Sharma were the
G     Chaimlan and the excise in-charge respectively of Sarla Performance
      Fibers Limited. Shri Dineshchandra Pandey was the dispatch in-charge
      ofM/s. Hindustan Cotton Company, a paitnership firm, engaged inter
      alia, in trading of Polyester Textured/Twisted Dyed Yarn since 1988.
      Sh. Gopal Bhagwan Dutt Sharma was the Manager of Sarla Performance
H     Fibers Limited at the relevant time. The reference to appellants herein
 SARLA PERFORMANCE FIBERS LTD. v. COMMISSIONER OF                             203
     CENTRAL EXCISE, SURAT-II [DIPAK MISRA, J.]

 will mean and include all the appellants.                                    A
      2. The appellants had procured partial oriented yarn (POY) falling
under Chapter 54 without payment of duty for the manufacture of various
types of yam, namely, polyestertexturised yarn, nylon covered yarn and
polyester covered yarn. A show cause notice No. V(Ch.54)15-6/0A/
2000 dated I 61h May, 2001 was issued by the Commissioner of Central          B
Excise, Surat - II requiring the appellant to explain why central excise
duty of Rs.32,92,854/-should not be recovered on the texturised yarn
allegedly removed by the appellants without payment of duty. The said
show cause notice also required the appellants to explain why penalty
should not be imposed under Section 1JAC of the Central Excise Act,
1944 (for short, 'tl1e Act'). That apart, the show cause notice also
                                                                              c
sought to confiscate the nylon covered yarn valued at Rs.1,72, 186/-and
further to recover duty thereon of Rs.55,202.96.
       3. After the show cause notice was issued, the appellants made
 payment aggregating to Rs.14,89,349.00 as against the duty payable under
 Section 3(1) of the Act (after taking into account the cum-duty benefit)      D
 and Rs. I I, 19,775.00 payable in the event the benefit ofNotification No.
 2105 was allowed.
        4. After the reply to the show cause notice was filed, the
 Commissioner of Central Excise, Surat-II, by his order-in-original no.
 l l/MP/2002 dated 21" March, 2002 (i) confiscated the seized nylon            E
 covered yarn weighing 245.980 kgs. valued at Rs.1,72, 186/- and
 appropriated a sum of Rs.86,093/- which was given as bank guarantee;
 (ii) demanded Rs.55,202.96 as differential duty on the corifiscated goods
 which were released provisionally before the adjudication; and (iii)
 confirmed the central excise duty amounting to Rs.32,92,854/- and ordered     F
 recovery of interest under Section 11 AB and imposed a penalty of
 Rs.33,48,060/- on the appellants. The adjudicating authority also imposed
 penalties on various persons set out in the impugned order.
       5. Being aggrieved by the aforesaid order, the appellant preferred
 appeals before the Customs, Excise and Service Tax Appellate Tribunal        G
 (CESTAT) (for short, 'the tribunal') under Section 35B of the Act to the
 extent the said order was adverse to it. The revenue also preferred an
 appeal before the tribunal as certain aspects were adverse to it. The
 tribunal referred the issue to the Larger Bench of the tribunal for
 consideration whether the goods cleared by the appellant were eligible
·for exemption under Notification No. I 25/84 dated 26.05.1984. The           H
204              SUPREME COURT REPORTS                          [20 l 6] 7 S.C.R.


A     Larger Bench vide order dated 03.08.2007 held that in case the goods
      cleared by the 100% EOU and sold in India whether with or without
      permission, the assessment shall be made under proviso to Section 3(1)
      of the Act and the exemption under Notification No. 125/84 shall not be
      applicable. After the matter was placed before the Division Bench of
      the tribunal vide its order dated 15.11.2007 referred to the Larger Bench
B
      decision and reiterated the view of the Full Bench by opining that the
      goods cleared by the I 00% EOU and sold in India whether with or
      without permission of the Development Commissioner, the assessment
      shall be made under proviso to Section 3( l) of the Act and exemption
      under Notification No. 125/84 shall not be applicable but granted some
c     reliefas regards the imposition of penalty. Resultantly, the tribunal vide
      order dated 15.11.2007 disposed of the appeal of the appellants and
      dismissed the appeal of the revenue.
             6. As the facts would unfold, the appellants filed an application
      before the tribunal for recall of order dated 15 .11.2007 in tenns ofjudgment
D     in J.K. Syntlletics Lt<I. v. Collector of Central Excise which was
                                                                    1
                                                                        ,


      dismissed on the ground that appeals were decided on merits and a
      detailed order considering all aspects was passed by the tribunal and as
      such it could not be said that the Bench defaulted in considering the
      merits of the case.

 E           7. The aforesaid orders were assailed before the High Court in
      Writ Petition No. 4758 of 2008 and the Division Bench of the High
      Court taking note of the submissions of the learned counsel for the
      parties, directed as follows:-
              "3. There were certain Appeals filed by the Petitioners and also
 F            there were certain Appeals filed by the Department. Mr. Desai,
              the learned Senior Counsel for the Respondents, has no objection
              if all the Appeals are heard together denovo including the Appeals
              filed by the Department since the Petitioners were not heard in
              the Appeals. The learned Counsel for the Petitioners also has no
              objection for the same.
 G             4. Under the aforesaid facts and circumstances, both the impugned
               orders d!lted 21" April, 2008 and J 5th November, 2007 passed by
               the CESTAT in the aforesaid Appeals are hereby quashed and
               set aside, and all the aforesaid Appeals stand restored to file. The
               CESTAT is directed to hear all the Appeals menti.~med hereinabove
 H    I   1996 (86) ELT 472 (SC)
SARLA PERFORMANCE FIBERS LTD. v. COMMISSIONER OF                              205
    CENTRAL EXCISE, SURAT -II [DIPAK MISRA, J.]

      afresh denovo without being influenced by their earlier orders in       A
      any manner."
       8. After the remit, it was contended before the tribunal that the
allegation of clandestine removal was based on a computer sheet and no
other records had been recovered; that the reliance by the department
to establish clandestine removal were the invoices issued by Hindustan         B
Cotton Company; and that the appellant SPL is a I 00% EOU and when
case goods were cleared without permission of the Development
Commissioner according to the department duty was payable under
Section 3( l) of the Act and exemption was available under notification
no. 125/84 CE. To sustain the stand, reliance was placed on SIV
Industries Ltd. v. CCE & Customs=. Be it stated that the reliance was          c
placed on Larger bench decision of the tribunal in Shriclwkra Tyres
Ltd. v. CCE Madras; and on that base it was contended that the
amount utilized by the assessee was to be treated as duty price and no
penalty could have been imposed on individuals since no evidence had
been brought on record to show that they were aware of the transactions.       D
      9. The stand of the assessee was resisted by the revenue
contending, inter alia, that the benefit of exemption notification could
not be extended since the notification incorporated several conditions to
be fulfilled and unless these conditions were fulfilled, exemption could
not be allowed; that the benefit of cum-duty price could not be extended       E
and invocation of a wrong section or rule in the show cause notice wou Id
not be a bar for imposition of penalty under the correct rule or section,
and that appellant was not eligible for treatment of clearances under
Section 3( I) of the Act. On behalf of the revenue reliance was placed
on Sterlite Optic"/ Tech110/ogies Ltd. v. CC&CE A11ra11g"bad •.
                                                                               F
      l 0. At this juncture, it is relevant to state that Member, Technical
came to hold that all the sales to DTA were clandestinely done in
contravention of the provisions of the EXIM policy and the appellant-
company did not raise any contention that the price charged included the
component of excise duty. On the contrary the appellants claimed
exemption under notification no. 125/84 and, therefore, the question of        G
SPL having recovered any cum-duty price from the customers in DTA
did not arise. Further it was evident that the transactions had been made

' (2000) 3 sec 367
' 1999 (108) ELT 61 (Tribunal)
4
  2005 (188) ELT 201 (Trib.-Mumbai)                                            H
206             SUPREME COURT REPORTS                          [2016] 7 S.C.R.



A     by SPL in the name of Hindustan Cotton Company and M.M. Sanghavi
      and the demands had been raised on the invoices raised. The transaction
      itself was artificial and no justification had been shown to treat the same
      as cum-duty price and, therefore, the decision of the Commissioner not
      to treat the price as cum-duty price deserved .to be upheld. As regards
      penalty on the company, the learned member held that it had been rightly
B
      imposed under Section I !AC of the Act read with Rule 1730 of the
      Central Excise Rules. As far as the individuals were concerned, the
      learned Member opined that the imposition on some was justified and
      imposition on certain individuals was not warranted. He, however,
      dismissed the appeal preferred by the department.
c           .11. The Member, Judicial concurred with the view of the Member,
      Technical as regards the clandestine removal and consequent
      confirmation of demand of duty and imposition of penalty on various
      appellants but, however, as far as the present appellant was concerned,
      the learned Member opined that the entire realization made by M/s.
D     Sarla Polyester Ltd. were required to be treated as cum-duty and as
      such, the benefit had to be extended to the appellant on the above count.
      She further observed that:-
             " Admittedly no duty has been recovered by them from their buyers.
             When the duty is being subsequently demanded from them on the
E            same realization, it is, in my view," required to be treated as cum
             duty and the assessable value has to be arrived at by deduction of
             the duty now being confirmed against the assessee. This has
             been the declaration oflaw in all the judgments relied upon by the
             learned Advocate. The fact as to whether the duty is being
             demanded on clandestine removal or on any other issue. should
F            not make a difference".
           12. The learned Member placed reliance on CCE Delhi v. Mis.
      Maruti Udyog Ltd.5, reproduced a passage from the same and opined
      that the entire realization was required to be considered as cum-duty-
      price and the benefit of the same had to be extended to the assessee and
G     for the said purpose, the matter needed to be remanded for recalculation
      of the quantum of duty. As far as penalty is concerned, she concurred
      with the Member, Technical, but also opined that it required to be remanded
      for imposing penalty equivalent to the duty calculated on the determination
      of the quantum.
H     '2002 (141) ELT 3 (SC)
SARLA PERFORMANCE FIBERS LTD. v. COMMISSIONER OF                                207
    CENTRAL EXCISE, SURAT -II [DIPAK MISRA, J.]

      13. The two Members noted three points as difference of opinion.          A
For the sake of completeness, we think it appropriate to reproduce the
same:-
      "a. Whether the entire sales value of the goods removed
      clandestinely is required to be considered as cum-duty and benefit
     ·of the same is to be extended to M/s. Sarla Polyester Ltd.                 B
      (Appellant no. I herein) or not?
      b. Whether the ratio of law declared by this Hon'ble Court in the
      case of CCE Delhi vs. M/s. Maruti Udyog Ltd. repo11ed in
      2002(141) ELT 3 applies to the facts of the present case or not
      and as to whether the benefit of the same is to be extended to the         c
      said assessee or not?
      c. Whether the matter is required to be remanded for quantification
      of the duty by treating entire realization as cum-duty price, as
      held by the Member (Judicial) or the appellant's plea on the above
      issue is required to be rejected by upholding the decision of the          D
      Commissioner not to treat the price as cum-duty price, as observed
      by learned Member (Technical)?
      d. Consequent to the re-quantification of duty on the above ground,
      the penalty imposed upon M/s. Sarla Polyester Ltd. would get
      reduced to the quantum of duty reconfirmed against the said                E
      appellant?
        14. lt is necessary to state here that before the pronouncement of
Orderon 13.10.2010, counsel on behalfofthe present assesee mentioned
that the controversy was no more res integra in view of the aecision
rendered in CCE v. NCC Blue Water Products Ltd. 6 Thereafter the
                                                                                 F
matter was heard on another day and on behalf of the Bench, the learned
Member, Technical passed the order. He took note of the stand of the
revenue that ratio cifthe said decision was not applicable as it was based
on the principle stated in earlier decision i.e. SIV Industries Ltd. (supra).
The learned Member also took note of the fact that the Larger Bench of
the tribunal had distinguished the decision in SIV Industries Ltd. (supra)       G
which was relied upon in NCC Blue Water products Ltd. (supra). At
this juncture, we think it appropriate to reproduce a passage from the
order passed by the Member, Technical on behalf of the Bench:-

' (20IOJ 12 sec 761: 2010 (258)_ ELT 161
                                                                                 H
208            SUPREME COURT REPORTS                         [2016] 7 S.C.R.


A           "It is quite clear that as submitted by learned SDR, the Hon 'hie
            Supreme Court followed the decision in case of SN Industries
            and also took note of the Board's circular issued in 2002 and it is
            quite apparent that circular issued in 2004 was not brought to the
            notice of learned SDR in Supreme Court. Further, we also note
            as submitted by the decision of the present case, the Larger Bench
B
            had considered the Hon'ble Supreme Court in case of SIV
            Industries Ltd. and had distinguished the same and reached the
            conclusion that in case of goods sold by I 00% EOU in DTA, the
            assessment shall be made under proviso to Section 3( I) of the
            Act."
c            15. After so stating, the learned Member quoted copiously from
      the Larger Bench. We think it appropriate to reproduce the relevant
      part:-
            "14. We have considered the submissions. We find that the
            wordings of proviso to Section 3(1) of the Central Excise Act and
D           Notification 125/84 which we have been called upon to interpret
            are similar and the basic dispute is as to how the words "allowed
            to be sold in India" are to be interpreted. After going through the
            various submissions made by both sides, we find that I 00% EOUs
            were allowed to be established with the sole purchase of exporting
E           100% of their production as is evident from the words I 00% EOUs.
            However, on account of certain hardship faced in getting export
            order, sales in DTA up to 25% were permitted from the year 1984
            but there was a clear intention to distinguish between such sales
            by the 100% EOU from the sales by domestic units other than
            100% EOU and it was for this purpose that proviso to Section
F           3( I) and Notification 125/84 was introduced. Since there were
            only two modes of clearance in which the I 00% EOUs could
            have cleared the goods i.e. one by export and the other by domestic '
            sale after obtaining the permission of the Development
            Commissioner, in respect of domestic sales the words "allowed to
G           be sold in India" were incorporated in both the provisos."
            16. Thereafter, the learned Member proceeded to state certain
      aspects which are not necessary and then reproduced the following
      passage:-
            "We also agree with the observation of the Larger Bench that the
H           decision of the Supreme court in SIV Industries case is
SARLA PERFORMANCE FIBERS LTD. v. COMMISSIONER OF 209
    CENTRAL EXCISE, SURAT-II [DIPAK MISRA, J.)

      distinguishable for the reason stated therein, as in that case the        A
      main thrust was that whether on the date of removal the I 00%
      EOU ceased to be I 00% EOU and therefore the provisions relating
      to I00% EOU could not have been applied to them. For the same
      purpose we hold that exemption under Notification 125/84 shall
      not be applicable in respect of goods manufactured by I 00% EOU
                                                                                B
      but sold in India."                                             ,
       17. After reproducing number of passages from the Larger Bench,
the learned Member observed thus:-
      "7. It may be seen that Larger Bench had considered the decision
      of Hon 'ble Supreme Court in case of SIV Industries Ltd., and             c
      has agreed with another decision of the Larger Bench in the case
      of Himalaya International, wherein also the decision ofHon'ble
      Supreme Court in case ofSIV Industries Ltd had been considered;
      and distinguished.
      8. To sum up, two decisions of Larger Bench of the Tribunal               D
      have considered the issue and distinguished the decision in the
      case of SIV Industries Ltd. and the decision of Larger Bench in
      the present case on a reference made in the appellant's case
      itself had considered, all aspects and the history of 100% EOU,
      statutory provisions and precedent decisions to reach conclusion
      that duty is chargeable under proviso to Section 3( I) of Central         E
      Excise Act, 1944."
       18. Being of this view, the Bench reiterated the difference of opinion
and the questions framed thereunder. After the judgment was delivered
by the tribunal, the appellant preferred W.P. No. 714 of201 I. The High
Court noted the submissions of the learned counsel for the writ petitioners     F
and opined that keeping in view the concept of self-restraint and the
requirement of judicial propriety, it was desirable for the assessee to
prefer an appeal before this Court. Being of this view, the High Court
declined to interfere. Hence, the present appeals have been preferred
under Section 35L(b) of the Act.                                                G
       19. It is not in dispute that the unit of the assessee-appellant is a
I 00% EOU and under the EOU scheme it was required to export the
goods manufactured by it. The stand of the assessee is that it was
eligible to clear goods up to a certain specified limit after obtaining due
permission from the Development Commissioner in tenns of Export
                                                                                H
210            SUPREME COURT REPORTS                           [2016] 7 S.C.R.



A     Import (EXIM) Policy read with Handbook of Procedure (HBP). It is
      the submission of Mr. V. Lakshmi Kumaran, learned counsel for the
      appellant that even if it is held that finished goods were removed by the
      assessee without requisite permission from the Development
      Commissioner, central excise duty is leviable in terms of Section 3( I) of
      the Act. It is contended by him thatthe tribunal has erroneously followed
B
      the Larger Bench decision of the tribunal in Himalaya International
      Ltd. v. Commissioner of C.Ex. Cltandigarlt 7• Learned counsel would
      submit that if the submission of the assessee is accepted, he will be
      entitled to refund as it has paid more than the amount than the duty
      liability determinable under Section 3(1) of the Act.
c            20. Mr. K. Radhakrishnan, learned senior counsel appearing for
      the revenue, per contra, would contend that the appellant which is a
      continuing EOU, was bound to export finished goods and as there has
      been non-fulfilment of the obligation and the goods have been cleared
      without permission of the competent authority, the appellants are liable
D     to pay the duty as determined by the tribunal. It is his further argument
      that the assessee cannot be assessed under Section 3( I) of the Act but
      under the proviso as held by the tribunal. Learned senior counsel would
      submit that the decision in SIV Industries Ltd. (supra) and NCC Blue
      Water Pnulucts Ltd. (supra) when seemly applied, the 100% EOU
      which was cleared in OTA without permission cannot be allowed to pay
E
      duty under Section 3( I) of the Act.
             21. To understand the controversy, it is necessary to scrutinize the
      relevant provisions, circulars in'the field and the interpretations placed
      by this Court on the pertinent provisions. The contentious part of Section
      3 of the Act, prior to amendment w.e.f. 11.05.200 I read as follows:-
F
            "Section 3. Duties specified in the First Schedule and the
            Second Schedule to the Central Excise Tariff Act, 1985 to
            be levied -(I) There shall be levied and collected in such manner
            as may be prescribed,-
G           (a) a duty of excise on all excisable goods which are produced or
            manufactured in India as, and at the rates, set forth in the First
            Schedule to the Central Excise Tariff Act, 1985 ( 5 of 1986);
            (b)a special duty of excise, in addition to the duty of excise
            specified in clause (a) above, on excisable goods specified in the
H     '(2003) 154 ELT 580
SARLA PERFORMANCE FIBERS LTD. v. COMMISSIONER OF                             211
    CENTRAL EXCISE, SURAT -II [DIPAK MISRA, J.]

      Second Schedule to the Central Excise Tariff Act, 1985 (5 of           A
      1986) which are produced or manufactured in India, as, and at
      the rates, set forth in the said Second Schedule.
      Provided that the duties of excise which shall be levied and
      collected on any excisable goods which are produced or
      manufactured, -                                                         B
      (i) in a tree trade zone and brought to any other place in India; or
      (ii) by a hundred per cent export-oriented undertaking and allowed
      to be sold in India,
      shall be an amount equal to the aggregate of the duties of customs      c
      which would be Ieviable under Section 12 of the Customs Act,
      1962 (52of1962), on like goods produced or manufactured outside
      India if imported into India, and where the said duties of customs
      are chargeable by reference to their value; the value of such
      excisable goods shall, notwithstanding anything contained in any
      other provision of this Act, be determined in accordance with the       D
      provisions of the Customs Act, 1962 (52of1962) and the Customs
      Tariff Act, 1975 (51 of 1975)."
      22. After the amendment the relevant part of the provision reads
as under:-
                                                                              E
      "Section 3. Duties specified in the First Schedule and the
      Second Schedule to the Central Excise Tariff Act, 1985 to
      be levied -(I) There shall be levied and collected in such manner
      as may be prescribed,-
      (a)a duty of excise to be called the Central Value Added Tax
                                                                              F
      (CENVAT) on all excisable goods excluding goods produced or
      manufactured in special economic zones which are produced or
      manufactured in India as, and at the rates, set forth in the First
      Schedule to the Central Excise Tariff Act, 1985 (5 of 1986);
      (b)a special duty of excise, in addition to the duty of excise
      specified in clause (a) above, on excisable goods excluding goods       G
      produced ur manufactured in special economic zones specified in
      the Serond Schedule to the Central Excise Tariff Act, 1985 (5 of
      1986) which are produced or manufactured in India, as, and at
      the rates, set forth in the said Second Schedule.
                                                                              H
212            SUPREME COURT REPORTS                            [2016] 7 S.C.R.


A           Provided that the duties of excise which shall be levied and
            collected on any excisable goods which are produced or
            manufactured, -
            (i) in a free trade zone or a special economic zone and brought to
            any other place in India; or
B           (ii) by a hundred per cent export-oriented undertaking and brought
            to any other place in India,
            shall be an amount equal to the aggregate of the duties of customs
            which would be leviable under the Customs Act, 1962 (52 of
            1962) or any other law for the time being in force, on like goods
c           produced or manufactured outside India if imported into India,
            and where the said duties of customs are chargeable by reference
            to their value; the value of such excisable goods shall,
            notwithstanding anything contained in any other provision of this
            Act, be determined in accordance with the provisions of the
D           Customs Act, 1962 (52of1962) and the Customs Tariff Act, 1975
            (51 of 1975)."
             23. Having noted the relevant provisions, it is apposite to appreciate
      what has been held in SIV Industries Ltd. (supra). In the said case, the
      appeal was preferred challenging the order of the tribunal whereby it
E     had directed that the duty of central excise was not payable under Section
      3(1) of the Act but under the proviso to Section 3(1) of the Act. The
      appellant therein was granted permission to set up a 100% Export
      Oriented Unit (EOU) for the manufacture of Yiscose staple fibre at its
      factory at Sirumugal in Coimbatore District in the State of Tamil Nadu.
      The Jetter of intent dated 18.12.1991 was issued to the appellant for the
 F    purpose by the Secretariat for Industrial Approvals (SIA), Ministry of
      Industry, Government oflndia. On 08.09. I 993 the appellant therein made
      an application to the Secretary, Ministry of Commerce, Government of
      India and sought debonding of its unit from I 00% EOU, i.e., withdrawal
      from I 00% EOU Scheme. By letter dated 18. l 0.1993 of the Ministry of
G     Commerce it was agreed in principle to allow the appellant to withdraw
      from the I 00% EOU Scheme subject to the conditions on which
      withdrawal was permitted. Once the debonding of the unit was permitted,
      finished goods earlier manufactured in the I 00% EOU could be cleared
      for domestic tariff area (DTA) on levy of duty of central excise. The
      dispute arose as to what rate of duty was to be levied. The contention of
H     the assessee was that excise duty is payable on the finished goods under
SARLA PERFORMANCE FIBERS LTD. v. COMMISSIONER OF                                213
    CENTRAL EXCISE, SURAT -II [DIPAK MISRA, J.]

the main Section 3(1) of the Act together with customs duty on the              A
imported raw material used in the manufact9re of the said finished goods
lying in the stock. The Revenue on the other hand contended that excise
duty under the proviso to Section 3( 1) of the Act was payable on the
finished goods and with no customs duty being levied on the raw materials
gone into the manufacture of finished goods. The Court encapsulateq
                                                                                 B
the issue by stating that the expression "allowed to be sold in India"
appearing in the proviso to Section 3(1) of the Act was the bone of
contention between the parties. The assessee contended that for the
application of the proviso to Section 3(1) two conditions have to be
cumulatively and simultaneously satisfied, viz., (I) goods should have
been produced or manufactured by an existing 100% EOU, and (2)                   c
these goods should have been allowed to be sold in India. After analyzing
various aspects and the circulars dated 17.02.1983 clarifying the
introduction of the proviso and the circular dated 29.05.1984 explaining
further amendment to the proviso to Section 3( I) of the Act, the Court
held:-
                                                                                 D
      "The contention of the Revenue is that permission to withdraw
      from the Scheme is itselfa permission to sell in India, i.e., when
      the unit is permitted to debond, it would be deemed to have been
      permitted to sell the goods in India. But then permission to sell in
      India has to be in terms or in accordance with the provisions of
      the export-import policy. Permission to sel! in India by 100% EOU          E
      consists of all those factors like value addition, fulfilment of export
      obligation, sale of a general currency licence-holder, item being
      not mentioned in the negative list and then there being a limit of
      25%, etc. When permission to debond is given, none of these
      criteria or aspects are applied by the Board of Approvals (BoA)            F
      to the closing stock of finished goods. The Board of Approvals is
      a statutory authority, which permits debonding. It is created under
      the Industrial (Development and Regulation) Act. On the other
      hand permission to sell the goods in India under and in accordance
      with the import policy has to be given by the Development
      Commissioner in the Ministry of Commerce. The Board of                     G
      Approvals and the Development Commissioner are two different
       authorities constituted for two different purposes. Permission to
       debond is a statutory function exercised by one statutory authority.
       On the other hand permission to sell in India is to be exercised by
       a different statutory authority. If reference is made to para 102 of      H
214            SUPREME COURT REPORTS                           [2016] 7 S.C.R.


A           the relevant import-export policy pennission of the Development
            Commissioner is required for selling the goods in [ndia up to a
            limit of 25% by I 00% EOU. Para 117 of the policy deals with
            de bonding of 100% EOU. Thus it is apparent that debonding and
            permission to sell in India are two different things having no
            connection with each other. It also becomes apparent that in view
B
            of the EOU Scheme as modified from time to time and
            corresponding amendments to Section 3 of the Act the expression
            "allowed to be sold in [ndia" in the proviso to Section 3(1,) of the
            Act is applicable only to sales made up to 25% of production by
            100% EOU in DTAand with the permission of the Development
c           Commissioner. No permission is required to sell goods
            manufactured by 100% EOU lying with it at the time approval is
            granted to debond."
            24. After so stating the Court noted the stand of the revenue that
      by debonding permission had been granted by BoA for selling the closing
D     stock of finished goods in India. Negativing the said contention, the
      Court held:-
            "By its application dated 8-9-1993 the appellant had only asked
            the Central Government for permission to debond the unit. Pending
            formal debonding clearance, the appellant requested the Central
E           Government that it might allow it to sell the goods in India. This
            request of the appellant was never acceded to by the authority
            concerned and letter of debonding was issued. This application of
            the appellant, therefore, could not be treated as an application for
            permission to sell in India as contended by the Revenue and the
            debonding letter ofBoA cannot be construed as permission to sell
F           in India. The argument of the Revenue that debonding assumes
            allowing all closing stock of the goods on the date of debond ing to
            be sold in lndia would be stretching the matter a little too far.
            Conditions for sale of25% of the finished products by EOU and
            sale of finished stock by a de bonded I00% EOU on the date of
G           debonding are different."
            25. Eventually, the Court interpreting the provision and notification
      issued under the relevant Rules held thus:-
            "Chapter V-A of the Central Excise Rules contains provisions for
            removal from a free trade zone or fr0m a 100% EOU of excisable
H           goods for home consumption. This ~hapter was made applicable
SARLA PERFORMANCE FIBERS LTD. v. COMMISSIONER OF 215
    CENTRAL EXCISE, SURAT -II [DIPAK MISRA, J.]

      to units under the EOU Scheme by Notification No. 130/84-CE            A
      dated 26-5-1984. This chapter contains Rules 100-A to 100-H.
      Rule 100-A provides that the provisions of this chapter shall apply
      to a person permitted under any law for the time being in force to
      produce or manufacture excisable goods in a l 00% export-oriented
      undertaking and who has been allowed by the proper officer to
                                                                             B
      remove such excisable goods for being sold in India on payment
      of duty of excise levi~ble thereon. It will be thus seen that this
      Chapter V-A would not be applicable where EOU is outside the
      EOU Scheme after the unit is de bonded. Under Rule I 00-H, Rule
      57-A and other Rules mentioned therein shall not apply to excisable
      goods produced or manufactured by a I 00% export-oriented              c
      undertaking. Rule 57-A relates to allowing credit of any duty of
      excise or the additional duty under Section 3 of the Customs Tariff
      Act, 1975 as may be specified by the Central Government in the
       notification, paid on the goods used in or in relation to the
       manufacture of the final products and for utilising the credit so
                                                                             D
       allowed towards payment of duty of excise leviable on the final
       products."
       26. In view of the aforesaid position, the Court was of the view
that the tribunal was not right in holding that duty was to be leviable in
terms of the proviso to Section 3(1) of the Act and, accordingly, it set
aside the judgment of the tribunal and restored that of the adjudicating     E
authority.
      27. The aforesaid judgment of this Court was distinguished by the
Larger Bench of the tribunal in Himalaya International Ltd. (supra).
The Larger Bench referred to circular No. 618/9/2002-CX dated
13.02.2002 and ruled thus:-                                                  F
      "A reading of the above circular would show that it was issued
      pursuant to the decision of the Supreme Court in SIV Industries
      Ltd. (supra), but without understanding the position that the
      Supreme Court did not deal with a case where clearance was
      made to DIA by 100% EOU in excess of the permission granted.           G
      It is contended on behalf of the assessee that the interpretation
      given in the circular referred to above is binding on the Revenue
      and therefore, this Tribunal cannot give a different interpretation
      to Section 3( 1) and the proviso at the instance of the Revenue. In
      suppo11 of the above contention reliance was placed on a decision      H
216            SUPREME COURT REPORTS                           [2016] 7 S.C.R.


A           of the Supreme Court in CCE, Vadodara v. Dhiren Chemicals
            Industries, 2002 (139) ELT 3 (S.C.). We find no merit in the above
            contention of the assessee. In CCE, Vadodara v. Dhiren Chemicals
            Industries the Supreme Court observed that regardless of the
            interpretation placed by it on the expression in the notification 'on
            which appropriate duty of excise has already been paid' ifthere
B
            are circulars which have been issued by the Central Board of
            Excise & Customs placing a different interpretation upon the said
            phrase that interpretation will be binding upon the Revenue. In
            the present case, we are not dealing with any circular of Central
            Board of Revenue interpreting the meaning of the proviso to Section
c           3(1) and which had been in force. On the other hand, the circular
            dated 13 .2.2002 is one issued giving a wrong interpretation to the
            decision of the Supreme Court. We have no hesitation to hold
            that an interpretation thus given by the Board to the decision of
            the Supreme Court will not be binding."
D           28. To appreciate the whole controversy in completeness, we may
      reproduce the said circular dated 13.2.2002:-
            "Subject: Removal of goods by I 00% EOUs to DTA- Non-levy
            of duty under Section 3( I) of Central Excise Act, 1944.
            I am directed to invite reference to Supreme Court's judgment in
E           case of SIV Industries v. CCE [2000 (117) E.L.T. 281 (S.C.)]
            vide which the Apex Court had held that "proviso to Section 3(1)
            regarding the duty chargeable on goods cleared by EOUs shall be
            applicable only to sales made in DTA upto 25% of production
            which are allowed to be sold into India as per provisions ofEXIM
F           Policy". In other words, Hon'ble Court decided that ifthe goods
            are "not allowed" to be sold in India, the proviso to Section 3( I) of
            Central Excise Act, 1944 shall not be applicable. The expression
            'allowed to be sold' has since been replaced with 'brought to any
            other place' w.e.f. 11-5-2001 vide Section 120 of Finance Act,
            2001 (14 of2001].
G
            2. It has come to the notice of the Board that field formations are
            interpreting the judgment of Apex Court to the effect that ifthe
            goods cleared by EOUs are not allowed to be sold into India, the
            Section 3(1) of Central Excise Act, 1944 is not applicable and
            duty can be demanded under the provisions of Customs Act, 1962
H           only. Board has taken a serious view of this mis-interpretation.
SARLA PERFORMANCE FIBERS LTD. v. COMMISSIONER OF                                 217
    CENTRAL EXCISE, SURAT-II [DIPAK MISRA, J.]

       The provisions of Central Excise Act, 1944 shall apply to all goods       A
       manufactured or produced in India for which Section 3 is the
       charging section. EOUs are also situated in India and the
       chargeability under Central Excise Act is never in doubt.
       Therefore, it is clarified that prior to 11-05-2001, the clearances
       from EOUs ifnot allowed to be sold in India, shall continue to be
                                                                                 B
       chargeable to duty under main Section 3(1) of Central Excise
       Act, 1944. Appropriate action may be taken immediately to
       safeguard revenue and all pending decisions may be settled
       accordingly."
      29. The said circular, as is perceptible, is in accord with the decision
rendered in SIV Industries Ltd. (supra). The said circular while so
                                                                                  c
indicating also clearly lays down the expression "allowed to be sold" has
been replaced with "brought to any other place" with effect from
11.05.2001 vide Section 120 of Finance Act, 2001 (14 of2001). The
circular being in consonance with the decision in SIV Industries Ltd.
(supra) and rightly so, it was absolute unnecessary on the part of the            D
Larger Bench of the tribunal to say that this Court in SIV Industries
Ltd. (supra) did not deal with the case where clearance was made to
OTA by 100% EOU in excess of the permission granted. The attempt
to distinguish the circular, in our considered opinion, was not only
unnecessary but also absolutely erroneous.
                                                                                  E
      30. After the judgment of the Larger Bench, the Central Board of
Excise and Customs, New Delhi brought out a circular dated 05.01.2004.
The relevant part of the said circular reads as follows:-
       "Subject: Withdrawal of Board's Circular No.618/9/2002-CX.,
       dated 13-2-2002 - Removal of goods by I 00% EOU to OTA -                   F
       Clarification regarding levy of duty on removal of goods by I 00%
       EOU to OTA.
       I am directed to draw your attention to Board's Circular No. 618/
       9/2002-CX., dated 13-02-2002 [2002 (140) E.L.T. T27] on the
       above subject wherein it was clarified that prior to 11-5-2001, the        G
       clearances from EOUs if not allowed to be sold in India, shall
       continue to be chargeable to duty under main Section 3(1) of
       Central Excise Act, 1944.This was based on an interpretation of
       Apex Court's decision in the case of SIV Industries Ltd. [2000
       (117) E.L.T. 281(S.C.)].
                                                                                  H
218            SUPREME COURT REPORTS                         [2016] 7 S.C.R.



A           2. However, attention is now invited to the decision of Larger
            Bench of CESTAT in the case of M/s. Himalaya International
            Ltd. v. Commissioner of Central Excise, Chandigarh [2003 (154)
            E.L.T. 580 (Tri. - LB)], wherein it has been held that "Rate of
            duty as per the proviso to Section 3(1) of the Central Excise Act,
            1944 would be applicable for assessing all the excisable goods,
B
            which were cleared by 100% EOU to DTA whether in terms of
            permission granted or in excess of permission granted". In view
            of the said judgment of the CESTAT, it is now clear that all the
            goods manufactured by EOU and cleared into DTA before final
            debonding of the EOU shall be chargeable to duty under proviso
c           to Section 3( 1) of the Central Excise Act, 1944 and under no
            condition, goods produced in I 00% EOU can be charged under
            main Section 3(1) of Central Excise Act, 1944.
            3. In view of the above judgment of the CESTAT, the matter has
            been re-considered by the Board and it has been decided to
D           withdraw the Board's Circular No. 618/9/2002-CX., dated 13-2-
            2002. The above-mentioned judgment ofCESTAT, which has been
            accepted by Board, may kindly be taken into consideration in
            deciding similar pending cases."
            31. Having noted the circular, we may refer to the authority in
E     NCC Blue Water Products Ltd. (supra). In the said case, the tribunal
      has held that the duty of Central excise on shrimps and shrimp seeds
      produced and removed by the assessee-respondent, a 100% export-
      oriented unit (EOU), in the Domestic Tariff Area (DTA) without the
      approval of the Development Commissioner, would be payable under
      Section 3( 1) of the Act and not under the proviso appended thereto.
 F    The two-Judge Bench taking note of the fact that during the period
      1994-1995 to 1997-1998, the assessee produced and sold 11, 15,29,540
      number of shrimp seeds and 48,365 kg of shrimps in DTA without
      obtaining the permission of the Development Commissioner; without
      issuing proper invoices as mandated under Rule 100-E of the Central
G     Excise Rules, 1944 (for short "the Rules") and without payment of excise
      duty. Besides, the assessee also undertook certain job-work whereby it
      processed 864.238 MT of shrimps and 905.580 MT offish and cleare~
      the said goods in OTA. According to the assessee, these goods were
      ultimately exported by OTA units. The said action of the assessee
      compelled the authority to issue a show cause notice requiring the
H
SARLA PERFORMANCE FIBERS LTD. v. COMMISSIONER OF                             219
    CENTRAL EXCISE, SURAT -II [DIPAK MISRA, J.]

assessee to show cause as to why duty of excise equal to aggregate of A
the duties of customs should not be levied under Section 3 of the Act
read with Rule 9(2) read with proviso to sub-section (1) of Section 11-A
of the Act and interest and penalty thereon. The matter was contested
by the assessee and eventually the tribunal ruled in favour of the assessee.
Before this Court, it was contended that since as per Note I of Section
                                                                             8
I of the First Schedule to the Customs Tariff Act, 1975, any reference in
that section "to a particular genus or species of an animal, except where
the context otherwise requires, includes a reference to the young of that
genus or species" and, therefore, both live shrimps and shrimp seeds are
classifiable under Sub-Heading 0306.23 of Chapter 3 of the First Schedule
to the Customs Tariff Act, 1975. It was also urged that the tribunal c
committed an error in relying on the decision of this Coui1 in SIV
Industries Ltd. (supra) because unlike in that case the assessee had
sought permission of the Development Commissioner, who in turn had
advised them to approach the SIA for permission to clear shrimps and.
shrimp seeds which, in fact, was granted and, therefore, they were
                                                                             D
required to pay duty under proviso to Section 3( I) of the Act. It was also
urged that under the Exim Policy, an EOU is obliged to make export> of
the entire production itself and not through any other entity. The Court
posed the following question:-
      "The core question for our consideration, therefore, is whether
      the sales of shrimps and shrimp seeds by the assessee in DTA,           E
      without requisite permission from the Development Commissioner,
      are to be assessed to excise duty under Section 3( I) of the Act or
      under the proviso to the said section?"
       32. To deal with the said question, the Court referred to Section 3
and it expressed understanding of the provision in the following terms:-      F
      "It is manifest that all excisable goods produced or manufactured
      in India are.exigible to duty of excise under Section 3 of the Act,
      the charging section, at the rates set forth in the Schedule to the
      Tariff Act. However, the proviso to the said section provides that
      the duties of excise on any excisable goods, which are produced         G
      or manufactured by a I00% EOU and allowed to be sold in India
      shall be an amount equal to the aggregate of the duties of customs
      which would be leviable under Section 12 of the Customs Act,
       1962. As aforestated, the controversy at hand is whether in the
      absence of an order by the competent authority, allowing the            H
220            SUPREME COURT REPORTS                           [201.6) 7 S.C.R.


A           assessee to sell the shrimp seeds and shrimps in India, excise
            duty on such sales could be levied and collected in terms of the
            proviso. To put it differently, the issue relates to the significance
            of the expression "allowed to be sold in India" as appearing in
            clause (ii) to the proviso to sub-section (I) of Section 3 of the
            Act."
B
            33. After so stating the two-Judge Bench referred to the decision
      in SIV Industries Ltd. (supra) and opined that:-
            " A similar issue fell for consideration of this Court in SIV
            Industries Ltd. (supra) In that case, the assessee was a 100%
c           EOU. Later on, they sought permission to withdraw from 100%
            EOU Scheme, for which the Ministry accorded the necessary
            permission. However, some of the goods lying in the unit were
            removed prior to the debonding. A dispute arose regarding the
            rate of duty payable on such sales. The plea taken by the assessee
            was that they were liable to pay duty under Section 3( 1) of the
D           Act together with customs duty on the imported raw material
            used in the manufacture of said finished goods, lying in the stock
            whereas the stand of the Revenue was that excise duty under the
            proviso to Section 3(1) of the Act was payable on the finished
            goods with no customs duty being leviable on the raw materials
 E          used in the manufacture of finished goods. Thus, the bone of
            contention in that case was also with regard to the interpretation
            of the expression "allowed to be sold in India" appearing in the
            said proviso. Interpreting the said expression. this Court held that
            the expression "allowed to be sold in India" used in the proviso to
            Section 3(1) of the Act is applicable only to sales made in DTA up
 F          to 25% of the production by 100% EOUs, which are allowed to
            be sold into India as per the provisions of the E1dm Policy. No
            permission was required to sell the goods manufactured by I 00%
            EOU lying with it at the time the approval is accorded to debond.
            The Court opined that the goods having been sold without
G           permission of the Central Government to debond the unit, the duty
            on the goods sold by the assessee was leviable under main Section
            3(1) of the Act."
                                                              fEmphasis addedl
            34. lt is necessary to state here that after so stating the Court also
H     noted that after pronouncement of the decision in SIV Industries Ltd.
SARLA PERFORMANCE FIBERS LTD. v. COMMISSIONER OF                               221
    <;:ENTRAL EXCISE, SURAT -II [DIPAK MISRA, J.]

(supra), the circular was issued on 13.02.2002 clarifying the position.        A
Interpreting the said circular, the Court held:-
      "19. As aforesaid, according to the Exim Policy 1992-1997 read
      with Appendix XXXIII of the Handbook of Procedures, an EOU
      may sell 50% of its production in value terms into a DTA only on
       issuance of a removal authorisation by the Development                   B
      Commissioner.
      20. In the instant case, admittedly at the time of sales of shrimps
       and shrimp seeds by the assessee in DTA, the Development
       Commissioner had not issued the requisite removal authorisation.
       Therefore, in view of the dictum of this Court in SIV Industries
       Ltd. (supra). with which we are in respectful agreement, and the         C
       afore-extracted circular issued by the Board following the said
       decision, excise duty on such sales is chargeable under main Section
       3(1) of the Act."
                                                          rEmphasis addedl
       35. The impugned order, as is manifest, relies on the Larger Bench       D
decision. It is to be noted that after the judgment in NCC Blue Water
Products Ltd. (supra) the said decision was brought to the notice of the
tribunal but it has opined that parent judgment in SIV Industries Ltd.
(supra) was distinguished by the Larger Bench and further the circular
dated 05.01.2004 was not taken note of by this Court in the subsequent
                                                                                E
judgment. On a careful scrutiny of the authority in NCC Blue Water
Products Ltd. (supra), we are of the considered opinion that it concurs
with the view expressed in SIV Industries Ltd. (supra). The circular
dated 05.01.2004 came into existence after the Larger Bench decision
in Himalaya International Ltd. (supra). We have already stated that
there was no justification for distinguishing the decision in SIV Industries    F
Ltd. (supra). The Technical Member who authored the judgment after
the decision in NCC Blue Water Products Ltd. (supra) was brought to
the notice of the tribunal has absolutely improperly noted that the circular
dated 05.01.2004 was not brought to the notice of this Court. The Court
in NCC Blue Water Products Ltd. case had not based its conclusion on
                                                                                G
the basis of the circular dated 13.02.2002. It is clear as day that it has
concurred with the ratio laid down in SIV Industries Ltd. (supra). It
 has been clearly opined that the expression "allowed to be sold in India"
 used in proviso to Section 3(1) of the Act would be applicable only to
 sales made in DTA of the production by 100% EOUs, which are allowed
to be sold into India as per the provisions of the Exim Policy.                 H
222             SUPREME COURT REPORTS                            [2016) 7 S.C.R.



A             36. The said authority has also made it clear that the circular issued
      in 2002 is in consonance with the authority in SIV Industries Ltd. (sL1pra).
      Thus, the view expressed by NCC Blue Water Products Ltd. (supra)
      has given the stamp ofapproval to the circular. It is a binding precedent
      on all the courts and the tribunals under Article I 4 I of the Constitution of
      India. The Larger Bench of the Tribunal, as stated earlier, could not
B
      have distinguished the judgment in SIV Industries Ltd. (supra). The
      later circular issued on 05.01.2004 on which reliance was placed by the
      revenue before the tribunal which has been taken note of in the impugned
      judgment is clearly indicative ofan erroneous approach. The decision in
      NCC Blue Water Products Ltd. (supra) was bound to be followed and
c     the tribunal could not have stated that 2004 circular was not taken note
      of. The tribunal should have appropriately appreciated that this Court
      was interpreting the statutory provision and it is also worthy to note that
      after the judgment delivered in SIV!tulustries Ltd. (supra) an amendment
      was brought into the provision. Therefore, the transaction prior to the
      date of amendment would be governed by SIV Industries Ltd. (supra)
D
      which has been followed in NCC Blue Water Products Ltd. (supra).
      Be it clarified that we are not concerned with the amended provision in
      this case.
             37. In view of the aforesaid analysis, the appeals are allowed.
      The judgment and order passed by the tribunal and that of the adjudicating
E     authority are set aside. The assessee shall be liable to pay the excise
      duty as per Section 3(1) of the Act. The competent authority is directed
      to compute the duty accordingly and proceed thereafter as per law. In
      the facts and circumstances of the case, there shall be no order as to
      costs.
F     Devika Gujral                                                Appeals allowed.