1990 (8) TMI 258 - AT - Central Excise

Summary

Issues:
Interpretation of the Explanation in Notification 240/79 dated 7-8-1979 to proviso (v) of Notification 36/79-C.E., dated 1-3-1979 - Whether prospective or retrospective in nature.

Analysis:

The appeal before the Appellate Tribunal CEGAT, New Delhi involved the consideration of whether the Explanation provided by Notification 240/79 dated 7-8-1979 to proviso (v) of Notification 36/79-C.E., dated 1-3-1979 is prospective or retrospective in nature. The appellants had manufactured snuff exceeding Rs. 10 per kg in value out of duty paid snuff not exceeding Rs. 10 per kg in value during a specific period. They cleared the manufactured snuff on payment of duty under protest at a certain rate. The appellants claimed a refund based on their interpretation that the snuff manufactured by them was chargeable to excise duty at a lower rate due to the duty already paid on the unmanufactured tobacco used. The dispute arose when the claim for refund for the period prior to 7-8-1979 was rejected, citing that the Explanation in Notification 240/79 could only be applied prospectively from the date of the notification. The Collector (Appeals) upheld this rejection, leading to the appeal before the Tribunal.

The Tribunal examined the relevant Notifications 36/79 dated 1-3-1979 and 240/79 dated 7-8-1979 to understand the context of the dispute. The key issue revolved around the interpretation of the Explanation provided in Notification 240/79. The appellants argued that the Explanation should be applied retrospectively from 1-3-1979 as it was clarificatory in nature. They relied on a previous decision to support their position. However, the Tribunal disagreed with this interpretation. It held that the Explanation in Notification 240/79 was not merely clarificatory but had substantive effects, providing greater relief than what was originally available under proviso (v) of Notification 36/79. The Tribunal emphasized that the benefit offered by the Explanation was significantly higher than the benefit under the previous provision. Therefore, the Tribunal concluded that Notification 240/79 should operate prospectively and not retrospectively.

In summary, the Tribunal rejected the appeal and held that the Explanation in Notification 240/79 was not clarificatory but substantive in nature, offering a more significant benefit than the previous provision. As a result, the Tribunal determined that the Notification should apply prospectively from the date of its issuance. The appeal was dismissed, and the cross objection was disposed of accordingly.