Prospective operation of exemption notification amendment barred retrospective inclusion of Nepal export clearances in value computation.

A substantive amendment to an exemption notification operates prospectively unless the notification expressly provides retrospective effect. Here, the amendment expanded the value of clearances by including exports to Bhutan or Nepal in the home-consumption computation, but the relevant clearances had been made before the amending notification came into force. As no retrospective intent was indicated, the amended explanation could not be applied to past clearances, and the inclusion of the Nepal export clearances in the value calculation was unsustainable. The impugned order was set aside, and the assessee succeeded on the retrospective-application issue.

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Issues: Whether the amendment introduced by Notification No. 1/98-C.E. to Notification No. 16/97-C.E., by including clearances for export to Bhutan or Nepal in the value of clearances for home consumption, applied retrospectively to clearances made before the amendment.

Analysis: The relevant clearances were made before the amending notification came into force. The amendment inserted a new explanation expanding the scope of clearances to be counted for the prescribed value limit. In the absence of any indication that the amendment was intended to operate on past clearances, and since the change affected the substantive legal position, it was treated as a substantive amendment operating only prospectively.

Conclusion: The amendment did not apply retrospectively to the clearances made prior to its issuance, and the inclusion of the Nepal export clearances in the value computation was not sustainable.

Final Conclusion: The impugned order was set aside and the assessee succeeded on the issue of retrospective application of the amending notification.

Ratio Decidendi: A substantive amendment to an exemption notification operates prospectively unless the notification expressly provides for retrospective application.

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