1997 (4) TMI 336 - AT - Central Excise

Summary

Issues:
- Applicability and retrospective effect of exemption Notification No. 279/86-C.E., dated 24-4-1986.

Detailed Analysis:

1. The appeal filed by M/s. Karnataka State Road Transport Corporation involved the retrospective effect of exemption Notification No. 279/86-C.E., dated 24-4-1986, concerning the payment of excise duty on motor vehicles. The appellant had paid excise duty based on a previous notification before the amendment on 24-4-1986.

2. The appellant claimed a refund based on the retrospective effect of the amended notification, which introduced a specific rate of duty of Rs. 8,000 per motor vehicle. The dispute arose as to whether the amendment was intended to maintain the effective rate of duties prior to 28-2-1986, leading to the rejection of the refund claim by lower authorities.

3. The advocate for the appellant argued that the retrospective exemption Act aimed to apply the revised rate from 1-3-1986 itself, justifying the refund claim filed within the specified time limit. On the other hand, the representative for the Revenue contended that the retrospective exemption Act only applied to notifications restoring rates of duty pre-28-2-1986.

4. The Tribunal examined the exemption Notification No. 279/86-C.E., which added a fresh entry for passenger motor vehicles and goods transport vehicles, subject to specific conditions. This exemption was part of a series of notifications issued under the Central Excise Rules, 1944.

5. The Tribunal considered the Central Excise Tariff Act, 1985, which aimed to preserve existing duty structures and correct unintended changes in duty rates. Several exemption notifications were issued to maintain effective duty rates post the new Tariff Act, with the aim of correcting unintended levies.

6. The Central Duty of Excise (Retrospective Exemption) Act, 1986, provided retrospective effect to notifications issued between 3rd March 1986 and 8th August 1986, under Rule 8 of the Central Excise Rules, 1944. The Tribunal noted that the exemption Notification No. 279/86-C.E. fell under this scheme.

7. Considering the provisions of the Retrospective Exemption Act, the Tribunal found the appellant entitled to a refund as the exemption Notification No. 279/86-C.E. was covered by the Act. The rejection of the refund claim by the lower authorities was deemed incorrect, and relief was granted to the appellants, subject to unjust enrichment provisions.

8. Consequently, the Tribunal allowed the appeal, granting relief to the appellants in line with the provisions of the Central Duties of Excise (Retrospective Exemption) Act, 1986.