2009 (12) TMI 356 - AT - Central Excise

National calamity Contingent duty- a show cause notice came to be issued demanding duty on the ground that the unbranded chewing tobacco and preparations containing chewing tobacco were subjected to National Calamity Contingent Duty at the rate of 10% ad valorem by virtue of Section 129 of the Finance Bill, 2001. The Additional Commissioner, Lucknow confirmed the demand of duty of Rs. 5,26,827/- and also directed payment of interest thereon and further imposed penalty of Rs. 10,000/-. Being aggrieved, the matter was carried in appeal where the Commissioner (Appeals) set aside the penalty, but confirmed the demand of duty and the interest by its order dated 29-11-08. Hence, the present appeal. Held that-merely because Circular 641/32/2002-CX., dated 26.6.2002 clarified that exemption to export goods under Notification No. 42/2001-C.E. (N.T.) was available from date of first notification, it would not mean that exemption to chewing tobacco/kimam under Notification No. 11/2002-C.E, can be given retrospectively. It was more so as this Notification did not speak of retrospective application.

Summary

Issues:
Whether Notification No. 5/2001-C.E. can be enforced retrospectively.

Analysis:
The case involved the question of whether Notification No. 5/2001-C.E., dated 1-3-2001, could be enforced retrospectively. The appellants, manufacturers of chewing tobacco, sought exemption from the National Calamity Contingent Duty (NCCD) under this notification. The dispute arose when the appellants cleared their products without paying the NCCD, leading to a demand for duty, interest, and penalty. The issue centered around the retrospective applicability of the notification to the period before its issuance.

The appellants argued that subsequent notifications and a circular by the Central Board of Excise & Customs indicated the government's intention to grant the exemption from the date of the first notification. They contended that even though their product was included under the exemption in a later notification, the benefit should be deemed available from the date of the initial notification. However, the respondent opposed this view, asserting that the notification did not explicitly mention retrospective applicability and, therefore, could not be enforced before its issuance.

The Tribunal, comprising Justice R.M.S. Khandeparkar and Member Shri Rakesh Kumar, rejected the appellants' argument. They emphasized that the powers to extend benefits under notifications rested with the executive authorities, and the Tribunal could not unilaterally apply them retrospectively. Granting retrospective benefits would essentially amount to rewriting the notification beyond its intended scope. Consequently, the Tribunal found no grounds for interference in the impugned order and dismissed the appeal. The decision highlighted the importance of adhering to the specified timelines and provisions of notifications without inferring retrospective applicability where not explicitly stated.

In conclusion, the Tribunal upheld the principle that notifications must be applied prospectively unless expressly stated otherwise. The judgment underscored the limitations of quasi-judicial bodies in extending the scope of notifications beyond their designated periods, reiterating the need for adherence to legal provisions and executive decisions in tax matters.