Demand - Retrospective effect to amendment of Rule 9A(5) - Central Excise - 207/47/85-CX.6

Demand - Retrospective effect to amendment of Rule 9A(5) Letter No. 207/47/85-CX.6 Dated 12-8-1986 Government of India Ministry of Finance (Department of Revenue) New Delhi Some doubts have been raised as to whether the amendment effected to rule 9A(5) by Notification No. 112/85, dated 1-5-1985 could be applied retrospectively or not. As an illustration a case was cited by a Collector which relates to illicit removal of unmanufactured tobacco in the year 1978. Demands were issued and confirmed in the year 1978 itself invoking the provisions of sub-rule 5 of rule. Subsequently, however, with effect from 1-3-1979 unmanufactured tobacco was fully exempted from Central Excise Duty. Thus even if an assessee wanted to pay the amount after 1-3-1979, as per the demand, no duty would be payable by him as on the date of payment of duty, the rate of duty on the product was NIL. A point was, therefore, raised as to whether in view of the amendment made to rule 9A(5) with effect from 1-5-1985 duty could be recovered from such persons as on the date of issue of the show cause notice (the relevant date as per the amended sub-rule) the rate of duty was not NIL. 2. This issue has been examined by the Board in consultation with the Law Ministry and the Law Ministry has opined that the amendment would apply retrospectively and that the duty recoverable would be the duty payable at the rate prevailing on the date of issue of show cause notice/demand.