Arijit Pasayat, J.— During hearing of this appeal it was fairly conceded by learned counsel for the parties that the decision of this Court in CCE v. Usha Martin Industries (1997) 7 SCC 47 on which CEGAT placed reliance was overruled by a subsequent decision of a Constitution Bench in CCE v. Dhiren Chemical Industries (2002) 2 SCC 127. But learned counsel for the respondent submitted that para 11 of Dhiren Chemical case (2002) 2 SCC 127 operates in its favour. It reads as follows:
“11. We need to make 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.”
2. Subsequently, the effect of this observation was noted in several decisions. In Kalyani Packaging Industry v. Union of India (2004) 6 SCC 719 it was noted as follows:
“6. We have noticed that para 9 (para 11 in SCC) of Dhiren Chemical case (2002) 2 SCC 127 is being misunderstood. It, therefore, becomes necessary to clarify para 9 (para 11 in SCC) of Dhiren Chemical case (2002) 2 SCC 127. One of us (Variava, J.) was a party to the judgment of Dhiren Chemical case (2002) 2 SCC 127 and knows what was the intention in incorporating para 9 (para 11 in SCC). It must be remembered that law laid down by this Court is law of the land. The law so laid down is binding on all courts/tribunals and bodies. It is clear that circulars of the Board cannot prevail over the law laid down by this Court. However, it was pointed out that during hearing of Dhiren Chemical case (2002) 2 SCC 127 because of circulars of the Board in many cases the Department had granted benefits of exemption notifications. It was submitted that on the interpretation now given by this Court in Dhiren Chemical case (2002) 2 SCC 127 the Revenue was likely to reopen cases. Thus para 9 (para 11 in SCC) was incorporated to ensure that in cases where benefits of exemption notification had already been granted, the Revenue would remain bound. The purpose was to see that such cases were not reopened. However, this did not mean that even in cases where the Revenue/Department had already contended that the benefit of an exemption notification was not available, and the matter was sub judice before a court or a tribunal, the court or tribunal would also give effect to circulars of the Board in preference to a decision of the Constitution Bench of this Court. Where as a result of dispute the matter is sub judice, a court/tribunal is, after Dhiren Chemical case (2002) 2 SCC 127, bound to interpret as set out in that judgment. To hold otherwise and to interpret in the manner suggested would mean that courts/tribunals have to ignore a judgment of this Court and follow circulars of the Board. That was not what was meant by para 9 of Dhiren Chemical case (2002) 2 SCC 127.”
3. A disparate view has been taken in CCE v. Maruti Foam (P) Ltd. (2004) 6 SCC 722 (SCC para 7) and Commr. of Customs v. Indian Oil Corpn. Ltd. (2004) 3 SCC 488 (SCC para 34). It appears to us that the law declared by this Court is binding on the Revenue/Department and once the position in law is declared by this Court, the contrary view expressed in the circular should perforce lose its validity and becomes non est.
4. Though the view expressed in Kalyani case (2004) 6 SCC 719 and our view about invalidation might clarify the observations in para 11 of Dhiren Chemical case (2002) 2 SCC 127 we feel that the earlier judgment in Dhiren Chemical case (2002) 2 SCC 127 being by a Bench of five Judges, it would be appropriate for a Bench of similar strength to clarify the position. In the circumstances, we refer the matter to a larger Bench of five Hon'ble Judges. Let the papers be placed before Hon'ble the Chief Justice of India for constituting an appropriate Bench.