Written option under Notification No. 9/2002-C.E. is mandatory for concessional duty and refund eligibility before first clearance

Notification No. 9/2002-C.E. conditions concessional duty and refund on the manufacturer exercising the option in writing before the first clearance, and that option continuing for the financial year. Where no written option is exercised during the relevant period, the exemption cannot be claimed and the omission is not a mere procedural lapse. The document states that the respondents were therefore not entitled to the concessional rate or refund, and the earlier contrary view was inapplicable.

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Issues: Whether the respondents were entitled to the concessional rate of duty and consequent refund under Notification No. 9/2002-C.E. despite not exercising the option in writing before the first clearance.

Analysis: Notification No. 9/2002-C.E. made the exemption conditional upon the manufacturer exercising the option in writing before effecting the first clearance, with the option remaining effective for the financial year. The respondents did not exercise that option at all during the relevant period. The benefit of the notification therefore depended on strict fulfilment of the prescribed conditions, and the omission could not be treated as a mere procedural lapse. On that basis, the earlier view treating the requirement as dispensable was held inapplicable.

Conclusion: The respondents were not entitled to the benefit of Notification No. 9/2002-C.E., and refund of duty was not payable. The issue is decided in favour of Revenue.

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