2018 (6) TMI 717 - AT - Central Excise

N/N. 9/2003-CE date 01.03.2003 - Effect of later notification - whether have retrospective or prospective effect - Held that - The amendment caused in N/N. 9/2003-CE by way of N/N. 67/2003-CE will have to be treated as retrospective and clarificatory amendment, hence the appellants would be very much eligible for exemption under N/N. 9/2003 w.e.f. 01.04.2003 even during the period 01.04.2005 to 10.08.2005 - Appeal allowed - decided in favor of appellant.

Summary

Issues: Interpretation of Notification No. 9/2003-CE and Notification No. 67/2003-CE regarding central excise duty liability and exemption eligibility.

In this judgment by the Appellate Tribunal CESTAT CHENNAI, the issue revolved around the interpretation of Notification No. 9/2003-CE and Notification No. 67/2003-CE concerning central excise duty liability and exemption eligibility for the appellants engaged in the manufacture of machined automobile parts. The appellants were operating under Notification No. 9/2003-CE, which provided a certain exemption threshold subject to conditions. However, a subsequent notification, No. 67/2003-CE, raised doubts on the eligibility of the appellants for the exemption during a specific period. The department initiated proceedings to demand central excise duty, which was confirmed by the original authority and the Commissioner (Appeals). The main question was whether the appellants were eligible for the exemption under Notification No. 9/2003-CE during the disputed period.

The appellant's counsel argued citing a Supreme Court case and a Tribunal decision, emphasizing that the exemption reinstated through a later notification should be considered clarificatory and retrospective. The counsel contended that based on the legal precedents, the appellants should be eligible for the exemption under Notification No. 9/2003-CE. On the contrary, the department's representative supported the impugned order upholding the central excise duty demand.

After examining the facts and legal arguments, the Tribunal found merit in the appellant's contentions. The Tribunal referred to the Supreme Court's decision, which clarified that when an exemption reinstated through a subsequent notification, it should be treated as retrospective and clarificatory. Consequently, the Tribunal held that the amendment in Notification No. 9/2003-CE by Notification No. 67/2003-CE should be considered retrospective, making the appellants eligible for the exemption from 01.04.2003 onwards, including the disputed period from 01.04.2005 to 10.08.2005. Therefore, the impugned order demanding central excise duty was set aside, and the appeal was allowed with any consequential benefits as per law.