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Issues involved:
The judgment addresses the issue of whether the amendment to Chapter Note 6 was clarificatory or prospective in nature, and consequently, whether the impugned order should be upheld or set aside. Details of the Judgment: 1. Background of the Amendment: The amendment to Chapter Note 6 of the Central Excise Tariff, specifically related to 'Plastics and Articles Thereof,' introduced clause (b) which stated that conversion of primary forms within the same heading amounts to "manufacture." This amendment came into force on 1-3-1988. 2. Dispute in Appeals: The dispute in both appeals revolved around whether converting plastic materials from one primary form to another constituted 'manufacture' attracting duty under specific chapter sub-headings. The activities of the assessees involved converting plastic granules to powder and solid to liquid forms, respectively, before the amendment. 3. Assessees' Submission: The assessees argued that prior to the amendment, conversion did not amount to 'manufacture' attracting excise duty. They maintained that the amendment in Note 6, which introduced clause (b), changed the definition of 'manufacture' and should only have prospective application. 4. Legal Interpretation: The assessees contended that the non obstante clause in the amendment indicated its overriding effect on contrary provisions, making it a new provision rather than a clarification. The Supreme Court's rulings on non obstante clauses were cited to support the argument that the amendment should be viewed as prospective. 5. Revenue's Stand: The Revenue argued that the processes undertaken by the assessees should be considered 'manufacture' based on the amended Note 6. They viewed the amendment as clarificatory and retrospective, aiming to resolve ambiguity between Note 3 and Note 6. 6. Judgment: The Tribunal held that the amendment to Chapter Note 6 was not clarificatory but introduced a new provision. As a result, its operation was deemed prospective. Consequently, the appeal of M/s. Das & Co. was allowed, while the appeal of the Collector of Central Excise, Bombay-I was rejected. The decision was made in favor of the assessees based on the prospective nature of the amendment.
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