Judgment:
1. This appeal is against the order of the Collector of Central Excise (Appeals), Madras dated 21-9-1990. Under the impugned order the learned lower authrtity has allowed the appeal filed by the Department under Section 35E(4) holding that the benefit of Notification 119/89, dated 27-4-1989 amending Notification 175/86 would be available prospectively with effect from 27-4-1988. The learned Consultant for the appellant pleaded that on 1-4-1989, the beginning of the financial year 1989-90, the appellant was not eligible for the benefit of Notification 175/86 as the aggregate value of their clearances in the previous financial year was in excess of the ceiling of Rs. 1.5 crores prescribed in the said notification and they started making their clearances on payment of duty from that date. He pleaded, this Notification came to be amended by Notification 119/89, dated 27-4-1989 and ceiling of clearances from the previous financial year for eligibility purposes was raised from Rs. 1.5 crores to Rs. 2 crores, and since the appellant's clearance was within the ceiling of Rs. 2 crores, the appellant became eligible for the benefit of the Notification 175/86.
They, therefore, at a later date, i.e., on 31-7-1989 filed a refund claim in respect of the duty paid by them from 1-4-1989 to 31-7-1989 and the learned Asstt. Collector allowed them the refund as claimed.
However, the departmental authorities did not agree with the learned lower authority's order so far as they related to the grant of refund for the period 1-4-1989 to 27-4-1989, i.e., prior to the amendment of Notification 175/86 as above. The learned lower appellate authority, he pleaded, has held as under in this regard : "It follows from the above that the clearances from 1-4-1989 to 26-4-1989 by units, which became eligible for the exemption under Notification No. 175/86-C.E. on account of the increase in the aggregate value of clearances in the preceding financial year to Rs. 200 lakhs with effect from 27-4-1989, would not be entitled for the exemption during the aforesaid period. In other words, the concession under the aforesaid notification would accrue to such units only with effect from 27-4-1989 onwards subject to the fulfilment of all the conditions in the notification".
The learned Consultant pleaded, since the issue, concession under Notification 175/86 is with reference to the clearances to be made in a financial year based on the satisfication of a criteria of the clearances made in the previous financial year, the benefit of this Notification should be allowed, even if the appellant became eligible for the benefit of the exemption based on a changed criterion in the middle of the financial year. In fact, he pleaded, the benefit of the amending Notification No. 119/89, dated 27-4-1989 should be retrospective.
2. The learned SDR pleaded that any notification can only have prospective effect and the benefit of the amending notification could be only from the date when it was issued.
3. We have given a careful thought to the pleas made by both the sides.
We observe that an assessee is called upon to pay the duty with reference to the date of the clearance of the goods from the factory and the goods are, therefore, to be charged to the rate of duty prevailing on the date of clearance of the goods. Between 1-4-1989 to 26-4-1989 admittedly the appellants were not eligible for the benefit of Notification 175/86 and any duty paid by them during this period has to be held to have been correctly paid. The amending Notification 119/89, dated 27-4-1989 changed the criterion for exemption and the units, therefore, came within the ambit of Notification 175/86 on 27-4-1989 based on the criteria of the clearance of Rs. 2 crores made during the previous year and also became eligible for the benefit of the notification. The goods manufactured by their unit, therefore, became eligible for the benefit of Notification only from this date.
There is nothing in the wording of the amending notification to say that notwithstanding the amendment having been made on 27-4-1989 the goods manufactured in the unit would be eligible for the benefit of the notification from 1-4-1989. In the absence of any express provision in this regard, on a well settled principle of law that the Notification would be effective only prospectively and not retrospectively, unless otherwise set out in the notification, we hold the learned appellate authority's order is maintainable in law. We find no merit in the appeal of the appellant and therefore, dismiss the appeal.