2003 (9) TMI 370 - AT - Central Excise

Summary

Issues:
Interpretation of Notification No. 2/95-C.E. as amended and computation of duty liability.

Analysis:
The case involved the interpretation of Notification No. 2/95-C.E., dated 4-1-1995 as amended and the computation of duty liability for the period from 1-1-2000 to 28-2-2000. Notification No. 2/95 was amended by Notification No. 38/99-C.E., dated 16-9-1999, which exempted goods from excess excise duty leviable under Section 3 of the Central Excise Act. The duty was to be calculated at the rate of 50% of each of the customs duties chargeable on like imported goods. The dispute centered around the method of computing this duty under the notification (para. 2-3).

Circulars issued by the Board provided guidance on the computation method, with the 2001 circular rescinding the 1994 circular and directing the recovery of duty based on the 2001 circular from 16-9-1999 onwards. The impugned order followed the 2001 Circular, while the appellants relied on a Tribunal decision stating that the 2001 circular could not be applied retrospectively (para. 3-4).

The Revenue argued that the 1999 circular, issued soon after the amendment to Notification No. 2/95, provided the same calculation method as the 2001 circular. They contended that the Tribunal erred in applying the 2001 circular prospectively, as the method was already prescribed in the 1999 circular. After considering both sides, the Tribunal found that the methods of calculation in the 1999 and 2001 circulars were the same, and thus, there was no retrospective application in this case (para. 5-6).

The Tribunal noted that the wording of Notification 2/95 required each customs duty to be calculated separately and then halved, while the 1999 and 2001 amendments required aggregation before halving. Despite a wrong circular issued in 1994, the correct method was provided in the 1999 circular. The 2001 Circular reiterated this method. The Tribunal held that the amount demanded in the impugned order was correct, equal to 50% of the duty on like imported goods (para. 7-8).

Ultimately, the appeal was rejected based on the Tribunal's analysis and interpretation of the relevant notifications and circulars in determining the duty liability for the disputed period (para. 9).