2005 (9) TMI 580 - AT - Central Excise

Exemption - Ships, boats etc. - Notification No. 25/97-C.E. - Hearing - Adjournment - Grant of

Summary

Issues:
Exemption withdrawal, retrospective application of notification, refund claim rejection

Exemption Withdrawal:
The appellants were manufacturing goods falling under Chapter 89. The exemption to their product was withdrawn, and the goods were subjected to duty at 8% ad valorem. Subsequently, Notification No. 25/97-C.E. dated 7-5-1997 was issued, exempting the products prior to the introduction of the said Notification. The appellants had cleared the goods on 10-4-1997 on payment of duty. They claimed a refund of Rs.30.49 lakhs, arguing that the notification should be treated as retrospective and applicable from 1-3-1997. However, the Commissioner (Appeals) rejected this contention, stating that the exemption granted by the notification was effective from the date of its issue, 7-5-1997, and not retrospective. The Tribunal agreed with this finding, emphasizing that there was nothing in the notification to suggest retrospective application from 1-3-1997. Thus, the appeal was rejected based on the specific provisions of the notification and the absence of retrospective intent.

Retrospective Application of Notification:
The crux of the issue revolved around the retrospective application of Notification No. 25/97-C.E. dated 7-5-1997. The appellants argued that the exemption granted should be considered retrospective from 1-3-1997, allowing them to claim a refund for duty paid earlier. However, both the Commissioner (Appeals) and the Tribunal found no merit in this argument. They held that the notification clearly exempted the goods from a specific date, 7-5-1997, without any indication of retrospective effect. The authorities emphasized that the legislative intent was crucial, and since there were no provisions for retrospective application in the notification, the exemption was deemed effective only from the date of its issuance.

Refund Claim Rejection:
The appellants' claim for a refund based on the retrospective application of the notification was rejected by the Commissioner (Appeals) and subsequently by the Tribunal. Despite the appellants' argument that the notification should be treated as applicable from 1-3-1997, both authorities upheld that the exemption granted by Notification No. 25/97 was not intended to have retrospective effect. The rejection of the refund claim was based on the clear language of the notification and the absence of any provisions indicating retrospective application. Consequently, the appeal for the refund was dismissed, affirming the decision that the exemption was effective only from the date of the notification's issuance, 7-5-1997.