2011 (2) TMI 933 - AT - Central Excise

Exemption -Notification No. 202/88-CE -the appellants placing reliance in the decision in the matter of Apex Steels (P) Ltd., v. Collector (1995 -TMI - 84483 - CEGAT, NEW DELHI) submitted that the three Member Bench of CEGAT has already held that the Notification No. 170/89 was clarificatory notification by which the benefit of exemption available under Notification No. 202/88-CE was extended to the product manufactured by the appellants and hence the appellants were justified in availing the benefit under the said notification - Decided in favour of assessee.

Summary

Issues Involved:
Interpretation of Notification No. 170/89-CE and Notification No. 202/88-CE for exemption eligibility.

Analysis:
The appeal concerned an order passed by the Collector, Excise department, Indore, confirming a duty demand, penalty, and confiscation of goods against the appellants engaged in manufacturing iron and steel products. The appellants claimed exemption under Notification No. 202/88-CE read with Notification No. 170/89-CE, which the department sought to deny, leading to a show cause notice. The Collector rejected the appellants' claim, prompting the appeal. The appellants relied on a previous decision by CEGAT in Apex Steels (P) Ltd. case, asserting that Notification No. 170/89 was clarificatory and extended the exemption to their product. The department argued that the Collector did not consider the CEGAT decision as it was delivered post the impugned order.

The CEGAT, in the Apex Steels (P) Ltd. case, examined the scope of the notifications and ruled that the twisting of bars did not exclude them from the exemption. The CEGAT held that the notifications intended to exempt bars and twisted rods from duty, emphasizing the legislative intent, departmental understanding, and trade notices. The CEGAT rejected the department's argument for a strict interpretation, stating that the subsequent notification clarified any ambiguity. The CEGAT concluded that Notification No. 170/89-CE was clarificatory and retrospective, benefiting the appellants. The judgment highlighted that no higher court had overruled the CEGAT decision, affirming the retrospective extension of the exemption to the appellants for the relevant period.

In light of the CEGAT's decision and the absence of conflicting rulings from higher courts, the Tribunal held that the impugned order denying the appellants' exemption claim was unsustainable. The Tribunal quashed the order, allowing the appeal and granting the appellants the benefit of the notification for the relevant period. The judgment emphasized the retrospective application of the clarificatory notification and the appellants' entitlement to the exemption during the specified period.