1997 (11) TMI 237 - AT - Central Excise

Summary

Issues:
Interpretation of Notification 174/89 for Central Excise duty exemption eligibility based on previous year's clearances.

Analysis:
The appeal before the Appellate Tribunal CEGAT, New Delhi involved a dispute regarding the interpretation and application of Notification 174/89 in the context of Central Excise duty exemption eligibility based on the value of clearances in the previous year. The case stemmed from an order-in-original passed by the Additional Collector of Central Excise, Aurangabad in favor of M/s. Arvind Detergents (P) Ltd., granting them the benefit of Notification 175/86 for clearances during April and May 1989. The Collector of Central Excise, Aurangabad, filed the appeal as directed by the Central Board of Excise & Customs, challenging this decision.

The crux of the matter revolved around the impact of the amending Notification 174/89, issued on 1-9-1989, which allowed the exclusion of the value of clearances of goods manufactured with another person's brand name from the aggregate value of clearances for determining eligibility under Notification 175/86. The department contended that this amendment should have only prospective effect and could not apply to clearances in April and May 1989. However, the Additional Collector had applied the amendment retroactively, leading to the eligibility of M/s. Arvind Detergents (P) Ltd. for duty-free clearance during the said months.

The Tribunal, after considering the submissions and relevant records, upheld the decision of the Additional Collector. It reasoned that the amending notification, by altering the value of clearances in the previous year, would impact the eligibility for exemption in the relevant year. Therefore, the Tribunal concluded that the benefit of the amendment should extend to clearances made in the financial year in question, such as those in April and May 1989. The Tribunal distinguished previous decisions, emphasizing the retrospective nature of the amendment and its relevance to determining exemption eligibility based on the previous year's clearances.

In light of the above analysis, the Tribunal dismissed the appeal and affirmed the decision of the Additional Collector, holding that the amendment to Notification 175/86 through Notification 174/89 had retrospective effect and applied to clearances in the relevant year, thereby entitling M/s. Arvind Detergents (P) Ltd. to duty-free clearance for April and May 1989.