1998 (6) TMI 230 - AT - Central Excise

Summary

Issues:
1. Interpretation of Notification 119/89-C.E. regarding its effective date and retrospective application.
2. Eligibility of the appellants to avail the benefit of Notification 175/86 and claim a refund of duty paid during a specific period.

Issue 1 - Interpretation of Notification 119/89-C.E.:
The case involved a dispute over the effective date and retrospective application of Notification 119/89-C.E. The appellants argued that the notification should be read in conjunction with the existing Notification 175/86 to allow them the benefit of the latter. They contended that the exemption under Notification 175/86 should not be denied as their clearances in the preceding financial year were within the prescribed limit. On the other hand, the Revenue argued that Notification 119/89-C.E. should only be effective from 27-4-1989 and not retrospectively. They maintained that granting a refund for the period prior to this date would amount to giving retrospective effect to the notification, which is impermissible under the law.

Issue 2 - Eligibility for Benefit and Refund Claim:
The central question was whether the appellants were entitled to claim a refund of duty paid during the period 1-4-1989 to 30-4-1989. The appellants had initially availed the benefit of Notification 175/86 but exceeded the prescribed limit for clearances, making them ineligible. Subsequently, with the issuance of Notification 119/89-C.E., their eligibility was reinstated. However, a dispute arose regarding the retrospective effect of this reinstatement and the admissibility of a refund for the duty paid during the interim period. The authorities had conflicting views on the matter, leading to the appeal before the Tribunal.

In the judgment, the Tribunal sided with the Revenue's interpretation, holding that Notification 119/89-C.E. could only be effective from 27-4-1989. The Tribunal emphasized that the notification could not nullify clearances made under the previous law. Citing the precedent set by the Supreme Court in the case of Cannanore Spg. and Weaving Mills Ltd., the Tribunal concluded that the appellants were entitled to the benefit of Notification 175/86 from 27-4-1989 onwards but were not eligible for a refund of duty paid for clearances before that date. Consequently, the appeal was dismissed, upholding the decision against granting the refund for the period prior to the effective date of Notification 119/89-C.E.