Exemption option under Notification No. 9/99-C.E. could not be withdrawn during the same financial year

An exemption under Notification No. 9/99-C.E. became binding from the date the manufacturer exercised the option, and the notification expressly barred withdrawal for the remaining part of the financial year. The provision had to be construed strictly according to its plain language, so a manufacturer who opted in from 1-4-1999 remained governed by the notification for the whole financial year. A later declaration and payment of duty at the normal rate could not override that express restriction. The issue was accordingly decided in favour of the Revenue.

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Issues: Whether a manufacturer who exercised the option to avail exemption under Notification No. 9/99-C.E. could withdraw from that option during the remaining part of the financial year.

Analysis: The option under the notification became effective from the date of its exercise and the notification expressly provided that such option shall not be withdrawn during the remaining part of the financial year. The exemption notification had to be construed strictly according to its plain language, and once the manufacturer chose to avail the benefit from 1-4-1999, the terms of the notification bound the assessee for the whole financial year. A fresh declaration and payment of duty at the normal rate could not override the express bar against withdrawal.

Conclusion: The assessee could not withdraw from the notification during the same financial year, and the issue is decided in favour of the Revenue.

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