1993 (9) TMI 227 - AT - Central Excise

Summary

Issues:
Interpretation of eligibility criteria for concessional notification under Central Excise law based on subsequent amendments.

Analysis:
The appeal before the Appellate Tribunal CEGAT, Madras involved a dispute regarding the eligibility of a unit for the benefit of a concessional notification under Central Excise law. The issue arose when the respondents claimed the benefit of Notification 175/86 for the period from 1-4-1989 to 27-4-1989, despite not meeting the eligibility criterion during the preceding financial year. The eligibility criterion specified that units with aggregate clearances exceeding Rs. 150 lakhs were not eligible for the notification. However, an amendment through Notification 119/89 dated 27-4-1989 increased this limit to Rs. 200 lakhs. The respondents sought a refund for the excess duty paid within the disputed period based on the amended notification.

The Department contended that eligibility for the notification should be determined based on the criteria in place at the time of clearance of goods. They argued that the amendment could not have retrospective effect, and any benefits from the amended notification should only apply prospectively. The Department challenged the lower appellate authority's decision, claiming that the legal position was misinterpreted.

The respondents, although not present during the proceedings, argued through written submissions. They referred to a Trade Notice and contended that the amended notification should be read in conjunction with the original notification for the entire financial year. They emphasized that the amendment made them eligible for the notification, allowing them to claim the concessional rate.

The Tribunal deliberated on whether the benefit of an exemption notification should be based on the criteria at the time of clearance or if subsequent amendments could alter eligibility retrospectively. The Tribunal emphasized that each clearance constituted a distinct legal event, and duty payment was governed by the prevailing law at that time. The Tribunal concluded that the amendment increasing the eligibility limit did not have a retrospective effect. Therefore, the respondents were not entitled to claim the benefit of the notification for the period before the amendment. The Tribunal held that any benefit from a notification should generally apply prospectively unless expressly stated otherwise. Consequently, the Tribunal set aside the lower appellate authority's decision and allowed the appeal of the revenue, denying the retrospective application of the amendment and the benefit of the notification for the disputed period.