1998 (1) TMI 222 - AT - Central Excise

Summary

Issues:
Demand of central excise duty for the period 1-3-1986 to 31-3-1986 under Notification No. 212/86-C.E. by M/s. Diamond Cables, Baroda.

Analysis:
The appeal filed by M/s. Diamond Cables, Baroda, pertains to the demand of central excise duty for the period 1-3-1986 to 31-3-1986. The appellants were initially availing exemption under Notification No. 85/85-C.E. dated 17-3-1985. Subsequently, Notification No. 175/86-C.E. dated 1-3-1986 was introduced for small scale units, replacing the previous exemption. However, on 25-3-1986, Notification No. 202/86-C.E. suspended the operation of Notification No. 175/86-C.E. until 31-3-1986, simultaneously introducing Notification No. 212/86-C.E. The Revenue recalculated the duty liability and issued a demand notice for Rs. 35,684.03 on 25-9-1986, claiming an increase in duty liability from 1-3-1986 to 31-3-1986.

The Tribunal noted that Notification No. 212/86-C.E. was issued on 25-3-1986 and remained in force until 31-3-1986. The Duties of Excise (Retrospective Exemption) Act, 1986 allowed retrospective effect to notifications issued between 3-3-1986 and 8-8-1986. The Act specified that duties of excise payable but not paid due to retrospective notifications need not be paid. For the period from 1-3-1986 to 24-3-1986, the appellants had paid duty under the previous Notification, rendering any demand under Notification No. 212/86-C.E. for this period unjustifiable. However, for the period from 25-3-1986 to 31-3-1986, duty calculation under Notification No. 212/86-C.E. was deemed appropriate.

Referring to the case of Sylvania Laxman Ltd. v. U.O.I., the Tribunal emphasized that while retrospective notifications benefiting citizens are permissible, a retrospective notification revoking an existing concession is impermissible. The Act mandated refund of duties collected if a retrospective notification did not result in additional liability. Consequently, the Tribunal held that any demand under Notification No. 212/86-C.E. for the period from 1-3-1986 to 24-3-1986 was unsustainable, but confirmed the demand for the subsequent period from 25-3-1986 to 31-3-1986.

In conclusion, the Tribunal set aside the demand for the period from 1-3-1986 to 24-3-1986 while upholding the demand for the period from 25-3-1986 to 31-3-1986. The appeal was disposed of accordingly.