1996 (9) TMI 385 - AT - Central Excise

Summary

Issues:
Retrospective effect of exemption Notification No. 265/86-C.E., dated 24-4-1986 on small scale exemption eligibility from 1-3-1986.

Analysis:
1. The appeal by M/s. Rajasthan Alloys & Steel (P) Ltd. concerns the retrospective effect of exemption Notification No. 265/86-C.E., dated 24-4-1986, which substituted Heading No. 7302.20 with 7302.90. The Central Duties of Excise (Retrospective Exemption) Act, 1986 was enacted to rectify errors in previous notifications. The issue is whether the amending Notification is deemed to have been issued on 1-3-1986.

2. The appellant's representative argued that the retrospective effect makes them eligible for small scale exemption from 1-3-1986. However, the Respondent's representative contended that since the appellants were not availing small scale exemption before 1-3-1986, they were not eligible post the budgetary changes.

3. The Tribunal considered the retrospective nature of the amending Notification and its impact on small scale exemption eligibility. The amending Notification dated 24-4-1986, by virtue of the Central Duties of Excise (Retrospective Exemption) Act, 1986, is deemed effective from 1-3-1986. The exemption under Notification No. 175/86-C.E. is for small scale units, subject to specified conditions.

4. The Respondent argued that pre-1-3-1986 non-availment of small scale exemption disqualifies the appellants. However, the Tribunal emphasized that the retrospective effect mandates interpreting Heading No. 7302.90 in place of 7302.20 from 1-3-1986. The decision on eligibility for exemption lies with the Central Excise authorities based on the conditions in the notification.

5. The Tribunal clarified that the retrospective exemption deems the amending Notification effective from 1-3-1986, impacting small scale exemption eligibility under Notification No. 175/86-C.E. The decision on eligibility rests on compliance with the notification's conditions, not solely on the absence of Heading No. 7302.90 in the annexure.

6. The Tribunal disposed of the matter with directions for the Central Excise authorities to assess the appellants' eligibility for small scale exemption based on the retrospective effect of the amending Notification and the conditions specified in Notification No. 175/86-C.E.