2001 (1) TMI 356 - AT - Central Excise

Summary

Issues:
Applicability of provisions of section 2(a) of the Central Duties of Excise (Retrospective Exemption) Act, 1986.

Analysis:
The case involved a dispute regarding the applicability of the Central Duties of Excise (Retrospective Exemption) Act, 1986 to a situation where the classification of goods changed under a new Tariff. The respondents, engaged in manufacturing goods previously covered under T.I. 68, were paying duty at 12% based on a specific notification. However, after a new Tariff came into effect, their products were reclassified under sub-heading 8548, triggering a demand for duty payment at 15% by the Revenue. The Collector (Appeals) reversed the duty rate, citing the Central Duties of Excise (Retrospective Exemption) Act, 1986, which allowed for exemption with retrospective effect. The Revenue appealed this decision, arguing that the respondents should pay duty at the higher rate due to exceeding clearance limits set by a new notification.

Upon review, the Tribunal noted that the respondents were indeed paying duty at 12% before the new notification came into force, despite their clearances surpassing the limit after the change in classification. The Tribunal referenced Section 2 of the Act, emphasizing its provision for retrospective effect from March 1, 1986, to maintain duty rates for goods at pre-changed levels. The Tribunal concluded that the respondents were entitled to the benefit of the Act, preventing an increase in duty rate from 12% to 15%. Therefore, the Collector (Appeals) decision to grant this benefit was deemed legally valid, and the Revenue's appeal was dismissed.

In summary, the Tribunal upheld the Collector (Appeals) decision, emphasizing the respondents' entitlement to the benefit of the Central Duties of Excise (Retrospective Exemption) Act, 1986, which prevented an increase in duty rate despite a change in goods classification under a new Tariff. The Tribunal's analysis focused on the Act's provision for retrospective effect to maintain duty rates, ultimately leading to the dismissal of the Revenue's appeal and the disposal of the respondents' cross-objections.