2003 (12) TMI 554 - AT - Central Excise

Summary

Issues:
1. Interpretation of the retrospective effect of Notification No. 118/80-C.E. dated 19-7-1980.

The Appellate Tribunal CESTAT, Kolkata, in the case, dealt with the issue of whether the explanation brought into force by Notification No. 118/80-C.E. dated 19-7-1980 would have a retrospective effect. The Tribunal had previously held that the amending Notification adding sub-rule (2) to Rule 56A with effect from 19-7-1980 was clarificatory and thus had a retrospective effect, citing the case of Orient Paper Mills v. Collector. The Revenue was given time to confirm whether they accepted the Tribunal's decision in the Orient Paper Mills case, but they failed to provide any information. The respondent referred to a Trade Notice from the Madurai Collectorate, dated 19-7-1985, which stated that the Notification in question would have a retrospective effect. The Tribunal considered this Trade Notice binding, as per the Hon'ble Supreme Court's decision in Collector of Central Excise, Bombay v. Kores (India) Limited. Therefore, the Tribunal concluded that there were no merits in the Revenue's Reference Application and rejected it.

In analyzing the issue, the Tribunal reviewed the Trade Notice from the Madurai Collectorate, which clarified that the explanation in question did not alter the substantive part of the Scheme of the input relief but was of a clarificatory nature. The Trade Notice explicitly stated that the proforma credit would be available even for cases where materials or component parts were received before the Notification's effective date. The Tribunal also emphasized that the Revenue itself considered the Notification to be retrospective, and based on the Supreme Court's precedent, Trade Notices like the one from Madurai are binding on Revenue authorities. This analysis led the Tribunal to dismiss the Revenue's challenge to the correctness of its earlier order and reject the Reference Application.