Conditional exemption option cannot defeat concessional duty when eligibility arises later in the financial year.

A conditional exemption notification linked to a financial year could not be used to deny concessional duty where the assessee was ineligible at the start of the year but became eligible later. The operative question was whether earlier payment of duty at the full rate prevented the assessee from claiming the exemption from the date eligibility arose. On the stated facts, the assessee sought the benefit only prospectively from that date, and retrospective operation of the amending notification was not in issue. The exclusion clause was therefore held inapplicable for the eligible period, and waiver of pre-deposit and stay of recovery were granted.

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Issues: Whether the assessee, becoming eligible for the concessional exemption notification after the beginning of the financial year, could be denied the benefit on the footing that it had earlier paid duty at the full rate and later opted for the notification.

Analysis: The notification provided an option not to avail exemption and to pay duty at the applicable rate for the remaining clearances after exercising that option in a financial year. The key question was whether that exclusion could be applied where the assessee was not eligible for the benefit at the commencement of the financial year but became eligible later. On the facts, the assessee's case consistently was that the benefit was sought only from the date on which eligibility arose. The order also notes that retrospective operation of the amending notification was not in issue. In that setting, the exclusion clause could not be used to defeat the assessee's claim for the period when it had become eligible.

Conclusion: The issue is answered in favour of the assessee; waiver of pre-deposit and stay of recovery were granted.

Ratio Decidendi: A conditional exemption option tied to a financial year cannot be invoked to deny concessional duty where the assessee was ineligible at the start of the year and becomes eligible only later during that year.

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