2005 (2) TMI 341 - AT - Central Excise

Summary

Issues Involved:
Interpretation of Notification No. 22/94 and its subsequent amendment by Notification No. 22/95 regarding the eligibility of benefit for goods manufactured by M/s. Komal Straw Board & Mill Board Industries.

Analysis:

1. The primary issue in this appeal was whether the benefit of Notification No. 22/94, as amended by Notification No. 22/95, is available to the goods manufactured by M/s. Komal Straw Board & Mill Board Industries. The appellant contended that they fulfilled all conditions stipulated in the notifications and switched to Notification No. 22/94 after exceeding the specified limit. They also argued that the amending Notification No. 22/95 should only be prospective and not retrospective, citing a previous tribunal decision. The appellant emphasized that the government's intention to impose conditions was clear from the timing of the amendment, which was made in the budget for the financial year 1995-96. They further argued against the imposition of penalties or interest, stating that the issue was centered on the interpretation of the notification.

2. On the other hand, the Departmental Representative argued that the amending notification clearly stated that if a manufacturer availed of exemption under Notification No. 1/93 during the same financial year, they would not be eligible for the benefit of Notification No. 22/94 after its amendment. It was contended that the benefit of the notification was denied only for clearances made after the specified date and that interest was payable under Section 11AA of the Central Excise Act.

3. The Tribunal analyzed the notifications in question, specifically Notification No. 22/94 and its amendment by Notification No. 22/95. The amendment inserted a proviso stating that the exemption under Notification No. 22/94 would not apply if the exemption under Notification No. 1/93 was availed of during the same financial year. Since the appellant had availed of the benefit of Notification No. 1/93 in 1994 up to a certain date, they were barred from availing the benefit of Notification No. 22/94 after its amendment in 1995. The Tribunal upheld the demand of duty for the period specified after the amendment, agreeing with the Departmental Representative that the amendment was not retrospective. The Tribunal also concurred with the appellant's argument that no penalty should be imposed as the issue was related to the interpretation of the notification. Consequently, the penalties were set aside, and the demand for interest was also revoked as the relevant provisions came into effect after the period in question.

4. In conclusion, the Tribunal dismissed the appeal and upheld the demand of duty for the specified period after the amendment of Notification No. 22/94 by Notification No. 22/95. The penalties were set aside, and the demand for interest was revoked based on the timing of the relevant statutory provisions.