2008 (5) TMI 54 - AT - Central Excise

Whether Notification No. 52/2002-C.E., dated 17-10-2002, can be held to be clarificatory with retrospective effect as held by the lower appellate authority Held, no - Commissioner (Appeals) is not justified in holding that this amendment was clarificatory and hence had retrospective effect - benefit of exemption from payment of NCCD on chewing tobacco for the period 1-9-2002 to 16-10-2002, is not justified revenue s appeal allowed

Summary

Issues:
1. Whether Notification No. 52/2002-C.E. can be held to be clarificatory with retrospective effect.
2. Whether the amendment brought by Notification No. 52/2002-C.E. was substantive.
3. Whether the benefit of exemption from payment of NCCD on chewing tobacco for a specific period can be granted retrospectively.

Analysis:
1. The main issue in this case is whether Notification No. 52/2002-C.E., which superseded a previous notification, can be considered clarificatory with retrospective effect. The predecessor-notification provided exemption from Basic Excise Duty and Additional Excise Duty on specified goods. The successor-notification added National Calamity Contingent Duty (NCCD) to the duties of excise for exemption. The Commissioner (Appeals) held this amendment as clarificatory with retrospective effect, granting exemption from NCCD on chewing tobacco for a specific period. The Revenue challenged this decision, arguing that the amendment was substantive, not clarificatory.

2. The Revenue contended that the addition of NCCD to the list of duties for exemption was a substantive amendment. Citing legal precedents, including the decision in Spice Telecom case, it was argued that an Exemption Notification is not presumed to be retrospective without an express provision. The Tribunal's decision emphasized that substantive amendments have prospective application. NCCD, being a new levy introduced by the Finance Act, 2001, was not intended for exemption before 17-10-2002. Therefore, the amendment in Notification No. 52/2002-C.E. cannot be considered clarificatory with retrospective effect.

3. The Tribunal agreed with the Revenue's argument, stating that the exemption provided under Notification No. 52/2002-C.E. for NCCD was the first of its kind and should not be extended retrospectively. The Tribunal found the Revenue's appeal well-founded, supported by relevant case law. Consequently, the impugned order was set aside, and the appeal was allowed. The decision highlighted the importance of distinguishing between clarificatory and substantive amendments in interpreting legal provisions related to excise duties and exemptions.

This detailed analysis of the judgment addresses the key issues involved in the case, providing a comprehensive understanding of the legal reasoning and conclusions reached by the Tribunal.