Retrospective capital goods credit restored where a later notification clarified and reinstated the omitted heading.

Credit on spares of conveyor systems falling under Heading 84.74 was held admissible for the disputed interim period, because the heading had been omitted from the eligible capital goods list by Notification No. 14/96-C.E. and later restored by Notification No. 25/96-C.E. The restored notification was treated as clarificatory and retrospective, on the basis that it reinstated a benefit already available before the omission and after the restoration, reflecting a consistent statutory policy. Accordingly, credit was available even during the intervening exclusion period, and the denial of credit was set aside.

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Issues: Whether credit on spares of conveyor system falling under Heading 84.74 was admissible during the period 23-7-1996 to 31-8-1996, when the heading had been omitted from the eligible capital goods list by Notification No. 14/96-C.E. and later restored by Notification No. 25/96-C.E.

Analysis: Credit on goods falling under Heading 84.74 was admissible before 23-7-1996 and after 31-8-1996. The intervening exclusion was followed by a restoration of the same heading in the eligible capital goods list. On that basis, and applying the principle that a subsequent notification restoring a consistent benefit is clarificatory in nature, the later notification was treated as not introducing a new benefit but as explaining the intended position. The decision followed the same reasoning adopted in earlier authority on retrospective operation of a reinstating notification.

Conclusion: Notification No. 25/96-C.E. dated 31-8-1996 was held to be retrospective, and credit on the goods in dispute was admissible even for the intervening period. The appeal was allowed and the denial of credit was set aside.

Ratio Decidendi: Where a subsequent notification restores a benefit that had been temporarily withdrawn, and the statutory scheme shows a consistent policy to extend that benefit, the restoring notification is to be treated as clarificatory and retrospective.

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