Retrospective application of later exemption conditions rejected where bonded premises remained in use for 100% EOU activity.

Later 2003 notification conditions could not be applied retrospectively to goods bonded under an earlier exemption regime, and the record did not support denial of benefit merely because a small portion of the premises was let out to a non-EOU. The plant and furniture in the bonded premises continued to be used for 100% EOU activity, and that factual position was undisputed. On those facts, the revenue was not shown to have a sufficient basis to invoke the later notification to deny exemption at the interim stage, and the assessee was treated as having a strong prima facie case for stay and waiver of pre-deposit.

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Issues: Whether the subsequent notifications of 2003, imposing a requirement of departmental permission, could be applied to deny exemption benefits under the earlier bonded regime, and whether letting out a small portion of the premises to a non-EOU justified denial of the exemption.

Analysis: The order records that the later notification could not be applied retrospectively to the earlier notification under which the goods were bonded. It also notes that the later condition requiring permission did not spell out a basis to deny the benefit merely because a small portion of the building had been let out. The plant and furniture installed in the bonded premises continued to be used for the appellant's 100% EOU activity, and this factual position was not disputed. On that basis, the revenue was held not to have justified invocation of the 2003 notification to deny the exemption at the interim stage.

Conclusion: The appellant was held to have a strong prima facie case, and the stay applications were allowed with waiver of pre-deposit and stay of recovery.

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