1982 (12) TMI 210 - AT - Central Excise

Summary

Issues:
Interpretation of notification No. 142/78 regarding the applicability of partial exemption from the first day of the financial year 1978-79 or from the date of issue of the notification.

Analysis:
The appellants filed a refund claim for the period from 1-4-1978 to 13-7-1978, amounting to Rs. 15,72,440.23, which was rejected by the Department citing that the partial exemption under notification No. 142/78 was available only from the date of issue, i.e., 14-7-1978. The appellants contended that the benefit of the notification should apply from the first day of the financial year 1978-79, i.e., 1-4-1978. Shri Koshy argued that the language of the notification, specifically condition (b) and the Explanation, indicated that the benefit was intended for the entire financial year 1978-79. He clarified that the previous duty concession scheme under notification No. 198/76 was replaced by the new notification No. 142/78 from 14-7-1978. On the other hand, Shri Tayal, representing the Department, asserted that exemption notifications are generally prospective and cannot have retrospective effect. He argued that the appellants' interpretation would lead to double benefits for certain factories.

The Tribunal examined the notification No. 142/78 in detail and considered the arguments presented. The Tribunal noted that the notification set a ceiling on the factory's entitlement to the concession, limited to not more than 75% of the licensed capacity for the financial year 1978-79. The notification specified that clearances for home consumption not exceeding 75% of the licensed capacity for the financial year 1978-79 would be entitled to exemption. The Explanation in the notification also accounted for quantities cleared at concessional rates under the previous notification. The Tribunal concluded that the appellants' interpretation was incorrect and that the concessional-rated clearances within the net ceiling under notification No. 142/78 could only begin from 14-7-1978, following the general rule that exemption notifications are applicable from the date of issue. Therefore, the Tribunal rejected the appeal, upholding the Department's decision to deny the refund claim for the period before the notification's issuance date.