1996 (10) TMI 328 - AT - Central Excise

Exemption - Notification No. 8/84-C.E., dated 1-3-1984 which amends Notification No. 275/82-C.E., dated 13-11-1982, not clarificatory as it clearly reflects change of policy

Issues Involved:
1. Classification of Cellulosic Spun Yarn and Cotton Yarn.
2. Applicability of Notification No. 275/82 for concessional rates of duties.
3. Interpretation and applicability of Serial Nos. 2 and 3 of the Table in Notification No. 275/82.
4. Consideration of subsequent amendments as clarificatory or policy change.
5. Ambiguity in exemption notifications and benefit to the Revenue.

Detailed Analysis:

1. Classification of Cellulosic Spun Yarn and Cotton Yarn:
The appellants are manufacturers of Cellulosic Spun Yarn Cross Reel in Hank and Cotton Yarn. There is no dispute about the classification of these Yarns under Tariff Item 18-III (1) for Cellulosic Spun Yarn and Tariff Item 18-A (1) for Cotton Yarns as per the erstwhile Central Excise Tariff before 1-3-1986.

2. Applicability of Notification No. 275/82 for Concessional Rates of Duties:
The dispute centers on the availability of Notification No. 275/82, dated 13-11-1982, during the period from 22-11-1983 to 28-2-1984. The Notification exempts cellulosic spun yarn and cotton yarn from excess duty under specified conditions. The appellants argue that they should benefit from this Notification despite not meeting the proviso (i) condition, which requires sales to a registered handloom cooperative society or an organization approved by the Government for handloom development.

3. Interpretation and Applicability of Serial Nos. 2 and 3 of the Table in Notification No. 275/82:
The appellants contend that if Serial No. 2 does not apply due to non-compliance with proviso (i), they should be assessed under Serial No. 3. However, the lower authorities and the Tribunal disagree, stating that Serial No. 3 applies only to goods not covered by Serial Nos. 1 and 2. Since the appellants' goods fall under Serial No. 2, they do not qualify for the benefits under Serial No. 3.

4. Consideration of Subsequent Amendments as Clarificatory or Policy Change:
The appellants argue that the subsequent amendment by Notification No. 8/84, dated 1-3-1984, should be read as clarificatory to Notification No. 275/82, thereby entitling them to concessional rates. The Tribunal rejects this argument, noting that the amendment represents a clear policy change rather than a clarification. The legislative history of the exemption Notification does not support the appellants' claim.

5. Ambiguity in Exemption Notifications and Benefit to the Revenue:
The learned JDR argues that the Notification should be read plainly and that any ambiguity should favor the Revenue, citing the Supreme Court cases of Novopan India Ltd. v. Collector and Liberty Oil Mills (P) Ltd. v. Collector. The Tribunal concurs, stating that the plain reading of Notification No. 275/82 does not support the appellants' interpretation, and any ambiguity should indeed benefit the Revenue.

Conclusion:
The Tribunal dismisses the appeal, agreeing with the lower authorities that the appellants do not qualify for the concessional rates under Serial No. 3 of Notification No. 275/82. The subsequent amendment by Notification No. 8/84 is deemed a policy change rather than a clarificatory amendment. The benefit of any ambiguity in the exemption notification is to be given to the Revenue, not the appellants.

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