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Regarding Supreme Court�s Decision in the case of GMMCO [2001 (127) ELT
508] in the context of Related Party Transaction
Customs
Circular No. 85 dated 11th December 2002
I
am directed to refer to the Tribunal�s decision against Revenue in the case of
Collector of Customs, Madras Vs. General Marketing and Manufacturing Co. Ltd. (GMMCO),
reported in [2001 (127) ELT 508], dated, 25th August, 2000. An appeal
no. 2772-73/ 2001] filed in the Hon�ble Supreme Court against the Tribunal
decision, has been dismissed in limine which reads as under:
"Delay
condoned. The Civil Appeal is dismissed".
The
effect of this judgment was consulted with Ministry of Law and Justice. The
Opinion of Ministry of Law and Justice is as follows:
"The
Hon�ble Supreme Court in a case reported in 1991 JT Vol. III, State of U.P.
Vs. M/s. Synthetics and Chemicals Ltd. and Another p. 268 where therein our
lordships have observed, �a decision which is not expressed and is not founded
on reasons nor it proceeds on consideration of issue cannot be deemed to be a
law declared to have a binding effect as is contemplated by Article 141.
Uniformity and consistency are core of judicial discipline. But that which
escapes in the judgments without any occasion is not ratio decided."
The
Hon�ble Apex Court in a matter reported in AIR 1967 SC Shama Rao Vs. State of
Pondicherry p. 1680 has held:
"It
is trite to say that a decision is binding not because of its conclusions but in
regard to its ratio and the principles laid down therein. Any declaration or
conclusion arrived without application of mind or preceded without any reason
cannot be deemed to be a declaration of or authority of a general nature binding
as a precedent. Restraint in dissenting or over-ruling is for sake of stability
and over-ruling is for sake of stability and uniformity but rigidity beyond
reasonable limits is inimical to the growth of law.
Here
in the present matter, it is an admitted fact that the order of the Supreme
Court is not a speaking one, as such, the same cannot be said to be a reasoned
order. So, in view of the ratio of the judgments in M/s. Synthetic�s case
(Supra) and Shama Rao�s case (Supra), no binding effect should be given to it
and should not be treated as precedent."
In
view of the above, it is requested that the Opinion of the Law Ministry may be
circulated to all the officers under your jurisdiction for information and
necessary action.
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