Exemption option once exercised cannot be withdrawn during the financial year; switch to another notification was barred.

An exemption notification that expressly bars withdrawal of an exercised option during the financial year binds the manufacturer for that year. A unit that had opted at the start of 2000-2001 under Notification No. 9/2000-C.E. could not later resile from that choice and switch to Notification No. 8/2000-C.E. The Board letter relied on by the assessee did not apply because it concerned different notifications. The option under Notification No. 9/2000-C.E. therefore remained operative, and the demand and penalty sustained in the impugned order were left undisturbed.

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Issues: Whether a manufacturer who had opted for Notification No. 9/2000-C.E. for the financial year 2000-2001 could withdraw that option during the same year and switch to Notification No. 8/2000-C.E.

Analysis: The exemption under Notification No. 9/2000-C.E. was subject to a condition that the option, once exercised, could not be withdrawn during the remaining period of the financial year. The assessee had specifically opted for that notification at the beginning of the year, when both notifications were available. The Board's letter relied upon by the assessee related to different notifications and did not govern the notifications involved in the present case.

Conclusion: The assessee was bound by the option already exercised under Notification No. 9/2000-C.E. and could not switch to Notification No. 8/2000-C.E. during the same financial year.

Final Conclusion: The appeal failed and the demand and penalty as sustained in the impugned order remained undisturbed.

Ratio Decidendi: Where an exemption notification expressly prohibits withdrawal of the option during the financial year, the assessee cannot resile from the option once validly exercised.

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