Exemption notification compliance turns on sunset clause eligibility and mandatory declaration timing for prospective relief only.

Under Notification No. 50/03-CE, the sunset clause was treated as governing unit eligibility rather than the date by which the option had to be exercised, so late filing of the declaration did not by itself defeat exemption. However, the written option requirement remained substantive: because the manufacturer had to exercise the option before first clearance, exemption operated only from the date of filing and could not relate back to the earlier production period. The filing was relevant to verify eligibility and prevent misuse, and relief was therefore confined to prospective operation from the declaration date.

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Issues: (i) whether the benefit of Notification No. 50/03-CE could be denied merely because the declaration was filed after 31/3/10; (ii) whether the exemption was available from the date of commencement of production after switching over or only from the date on which the declaration was filed.

Issue (i): Whether the benefit of Notification No. 50/03-CE could be denied merely because the declaration was filed after 31/3/10.

Analysis: The Board's circular clarified that the sunset clause governs eligibility of the unit and not the date by which the option must be exercised. It further stated that an eligible unit may exercise the option even after the sunset date, provided the eligibility conditions are otherwise satisfied. The Court treated this clarification as consistent with the notification and rejected the departmental view that late filing by itself destroyed eligibility.

Conclusion: The exemption could not be denied solely on the ground that the declaration was filed after 31/3/10.

Issue (ii): Whether the exemption was available from the date of commencement of production after switching over or only from the date on which the declaration was filed.

Analysis: The notification required the manufacturer to exercise the option in writing before first clearance, and the option was to operate from the date of exercise. The filing of the declaration was not treated as a mere technical formality because it enabled verification of eligibility and prevented misuse of the exemption. In the absence of any earlier intimation or declaration, the exemption could not relate back to the earlier period.

Conclusion: The exemption was available only from 28/6/10 and not for the period prior to that date.

Final Conclusion: The appeal succeeded only to the extent of rejection of the department's objection based on the sunset date, while relief for the earlier period was refused, leaving the assessee entitled to exemption only prospectively from the declaration date.

Ratio Decidendi: Under an exemption notification, a sunset clause may control eligibility of the unit, but a mandatory option or declaration requirement operating to prevent misuse is substantive and exemption cannot be availed for any period prior to compliance with that condition.

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