2014 (1) TMI 117 - AT - Central Excise

Clandestine removal of goods Benefit of SSI Exemption Notification No.8/2001withdrawn Held that - There is no indication at the time of reintroduction of the disputed goods to the benefit of exemption notification so as to reflect upon the fact that such exemption was with retrospective effect - Budget speech clearly states that SSI exemption is being withdrawn in respect of arms and ammunition is clear indication of the fact that such exemption was withdrawn with clear understanding and is a conscious ac - judiciary cannot act as legislature and enact the provisions of law so as to fill any gap, which have been consciously left by the legislature. Grant of SSI exemption to various goods is the policy matter of the Government of India and cannot be interpreted by the judiciary on the ground that such benefit should have been extended to the manufacturers of arms and ammunition with effect from 1-4-2001 -the notifications issued have to be held as having prospective effect and cannot be claimed retrospective unless such notifications are clarificatory in nature or have been specifically pronounced to be with retrospective effect Relying upon Shri Bakul Oil Industries v. State of Gujarat 1986 (11) TMI 45 - SUPREME COURT OF INDIA Decided against Assessee.

Summary

Issues:
Interpretation of SSI exemption notification for arms and ammunition parts from 1-4-2001 to 30-9-2001.

Analysis:
The case involved three appeals with a common issue - whether the appellants were entitled to the benefit of the Small Scale Industries (SSI) exemption notification for parts of arms and ammunition during the period from 1-4-2001 to 30-9-2001. The appellants, engaged in manufacturing revolver parts, were found to have cleared final products without duty payment. The SSI exemption was withdrawn from 1-4-2001, but reintroduced on 1-10-2001. The key question was whether the exemption applied during the intervening period.

The SSI exemption was withdrawn from arms and ammunition parts by Notification No. 8/2001-C.E. effective from 1-4-2001. This withdrawal was later reversed by amending Notification No. 47/2001-C.E. on 1-10-2001. The appellants argued that the reintroduction should be considered retrospective, relying on a Tribunal decision. However, the Revenue contended that the exemption was not available during the intervening period as per legislative intent.

The Tribunal examined the legislative intent and held that the exemption was not available for arms and ammunition parts from 1-4-2001 based on the Budget speech and notification details. The Tribunal rejected the retrospective application of the reintroduced exemption, emphasizing that the legislature reintroduced the exemption only from 1-10-2001 without any retrospective indication. The Tribunal emphasized that judicial interpretation cannot override legislative intent regarding SSI exemption policies.

Regarding the Tribunal's decision relied upon by the appellants, the Tribunal clarified that a Single Member judgment on the issue was non-binding, and the Division Bench decision following it lacked discussion on retrospective effect. The Tribunal highlighted that notifications are presumed to have prospective effect unless explicitly stated otherwise, citing a Supreme Court decision. Ultimately, the Tribunal upheld the lower authorities' orders, rejecting the appeals.

In conclusion, the Tribunal ruled that the SSI exemption for arms and ammunition parts was not applicable from 1-4-2001 to 30-9-2001, and the reintroduction on 1-10-2001 did not have retrospective effect. The decision emphasized the importance of legislative intent in interpreting tax exemptions and the prospective nature of notifications unless specified otherwise.