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2017 (4) TMI 848 - AT - Central ExciseWhether the N/N. 12/2014-C.E. dated 11.07.2014 was clarificatory in nature and whether the same can be applied retrospectively for the period 17.03.2012 to 10.07.2014 in respect of the paper bidis manufactured by the appellants? Held that - from the wording of the notification, no concessional rate was available to the appellants during the impugned period. The relevant entry no.2403 1929 was not there in the N/N. 12/2012-C.E. The appellants have built their case on the Budget Changes, 2012-2013 and on the letter of Joint Secretary, TRU. However, the N/N. 12/2012-C.E. does not reflect the tariff entry of the appellants product at Sl.No.48, which gives exemption to the products under tariff heading 2403 1990. It is also an admitted fact that no representation of any kind was made by the appellants to the Government during the intervening period and that N/N. 12/2014-C.E. does not expressly mention that it is clarificatory in nature. On being asked, the appellants have not been able to show anything to substantiate that N/N. 12/2014-C.E. was clarificatory in nature. Benefit of N/N. 12/2014-C.E. cannot be claimed retrospectively and is held to be prospective in nature. Hence, demand and the interest thereon are upheld. As for the penalty, the N/N. 12/2012-C.E. is clear and unambiguous and hence it cannot be said that there was a problem in interpreting the notification - it was a clear case of misuse of notification for which penalty has been rightly imposed in all the orders. Appeal dismissed - decided against asseessee.
Issues Involved:
1. Classification of Handmade Branded Paper Rolled Biri under Notification No.12/2012-CE. 2. Applicability of concessional duty rate under Notification No.12/2012-CE. 3. Retrospective application of Notification No.12/2014-CE. 4. Validity of the demand for differential duty, interest, and penalty. Detailed Analysis: 1. Classification of Handmade Branded Paper Rolled Biri under Notification No.12/2012-CE: The appellants were engaged in manufacturing Handmade Branded Paper Rolled Biri, classifiable under sub-head 2403 19 29 of the Central Excise Tariff Act. They paid Central Excise duty at ?21 per thousand under Notification No.12/2012-CE. The revenue contended that this notification did not cover the said goods, and the appellants should have paid duty at ?30 per thousand. The adjudicating authority confirmed the demand, which was upheld by the Commissioner (Appeals). 2. Applicability of Concessional Duty Rate under Notification No.12/2012-CE: The appellants argued that an error in Notification No.12/2012-CE replaced the previous Notification No.3/2006-CE, and a different tariff item number was erroneously incorporated against Sl.No.48 instead of 2403 19 29. They referenced the Finance Minister's Budget Speech, 2012-2013, and Budget Changes, 2012-2013, which indicated a nominal increase in excise duty on hand-rolled bidis. They also cited a letter from the Joint Secretary, TRU, explaining the duty increase. The appellants claimed that the error was corrected by Notification No.12/2014-CE, which should be considered clarificatory and applied retrospectively. 3. Retrospective Application of Notification No.12/2014-CE: The Tribunal examined whether Notification No.12/2014-CE, dated 11.07.2014, was clarificatory and could be applied retrospectively from 17.03.2012 to 10.07.2014. The Tribunal found that the wording of Notification No.12/2012-CE did not provide a concessional rate for the appellants during the impugned period, and no representation was made to the Government to rectify the error. The Tribunal noted that Notification No.12/2014-CE did not explicitly state it was clarificatory. The Tribunal referenced the case of WPIL Ltd. and concluded that an analogous situation did not exist in this case. The principle that an exemption notification should be strictly construed was upheld. 4. Validity of the Demand for Differential Duty, Interest, and Penalty: The Tribunal agreed with the Commissioner (Appeals) that legislative intention behind Notification No.12/2012-CE could not be inferred from budgetary proposals or speeches. The Tribunal cited the Bombay High Court's decision in Amin Merchant, upheld by the Supreme Court, emphasizing that only enacted law holds legal force. The Tribunal found no basis to consider Notification No.12/2014-CE as clarificatory and applicable retrospectively. Consequently, the demand for differential duty and interest was upheld. Regarding the penalty, the Tribunal noted that Notification No.12/2012-CE was clear and unambiguous, and the appellants' misuse of the notification warranted the penalty imposed by the Commissioner (Appeals). Conclusion: The Tribunal found no infirmity in the orders of the Commissioner (Appeals) and upheld the demand for differential duty, interest, and penalty. All appeals filed by the appellants were dismissed.
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