1994 (9) TMI 106 - AT - Central Excise

Issues Involved:
1. Applicability of Notification No. 212/86 for the entire month of March 1986.
2. Interpretation of the Central Duties of Excise (Retrospective Exemption) Act, 1986.
3. Validity of demands raised by the Department for the period from 1-3-1986 to 24-3-1986.
4. Whether Notification No. 175/86 was applicable during the period from 1-3-1986 to 24-3-1986.
5. The effect of the suspension of Notification No. 175/86 by Notification No. 202/86.

Detailed Analysis:

1. Applicability of Notification No. 212/86 for the Entire Month of March 1986:
The Tribunal examined whether Notification No. 212/86, which was issued on 25-3-1986, should be applied retrospectively from 1-3-1986. The Tribunal concluded that Notification No. 212/86, which restored the rates of duty prevailing before 1-3-1986, was applicable for the entire month of March 1986. This conclusion was based on the provisions of the Central Duties of Excise (Retrospective Exemption) Act, 1986, which aimed to maintain the effective rates of duties at the level obtaining prior to 1-3-1986.

2. Interpretation of the Central Duties of Excise (Retrospective Exemption) Act, 1986:
The Tribunal interpreted the Central Duties of Excise (Retrospective Exemption) Act, 1986, to mean that any notification issued between 3-3-1986 and 8-8-1986, which aimed to restore the rates of duty to the level before 1-3-1986, would be deemed effective from 1-3-1986. Notification No. 212/86 fell within this period and restored the rates to those prevailing under Notification No. 85/85, dated 17-3-1985. Therefore, it was deemed effective from 1-3-1986.

3. Validity of Demands Raised by the Department for the Period from 1-3-1986 to 24-3-1986:
The Tribunal upheld the demands raised by the Department for the period from 1-3-1986 to 24-3-1986, based on Notification No. 212/86. The Tribunal rejected the argument that the Central Duties of Excise (Retrospective Exemption) Act, 1986, only provided relief to assessees and did not empower the Department to raise additional demands. The clear language of the statute indicated that the rates of duties should be maintained at the level prior to 1-3-1986, which justified the demands for differential duty.

4. Whether Notification No. 175/86 was Applicable During the Period from 1-3-1986 to 24-3-1986:
The Tribunal found that Notification No. 175/86, which prescribed different rates of duty, was not applicable during the period from 1-3-1986 to 24-3-1986. This was because Notification No. 212/86, which restored the rates to those prevailing before 1-3-1986, was deemed effective from 1-3-1986 under the Central Duties of Excise (Retrospective Exemption) Act, 1986. Therefore, the rates under Notification No. 175/86 were not applicable for this period.

5. The Effect of the Suspension of Notification No. 175/86 by Notification No. 202/86:
Notification No. 202/86 suspended the operation of Notification No. 175/86 for the period from 25-3-1986 to 31-3-1986. The Tribunal held that this suspension was temporary and did not affect the retrospective application of Notification No. 212/86. The Tribunal emphasized that the suspension period alone was relevant for determining the applicability of Notification No. 175/86, and the retrospective application of Notification No. 212/86 was in accordance with the Central Duties of Excise (Retrospective Exemption) Act, 1986.

Conclusion:
The Tribunal upheld the impugned order and rejected the appeal, concluding that Notification No. 212/86 was applicable for the entire month of March 1986. The Tribunal's decision was supported by the interpretation of the Central Duties of Excise (Retrospective Exemption) Act, 1986, which aimed to maintain the effective rates of duties at the level obtaining prior to 1-3-1986. The Tribunal also rejected the argument that the Act only provided relief to assessees and did not empower the Department to raise additional demands. The Tribunal's decision was further supported by the Allahabad High Court's judgment in a similar case and the Tribunal's own previous decisions.

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