Strict construction of exemption notifications bars retrospective relief unless a genuine omission or ambiguity is clearly shown.

A later exemption notification could not be treated as clarificatory or applied retrospectively where the earlier notification, read on its enacted text, did not contain the relevant tariff entry and the later instrument did not expressly correct a genuine omission or ambiguity. Budget speeches, departmental letters and other extrinsic materials could not override the notification itself, and exemption notifications were to be strictly construed. On that basis, the concessional duty claim for the disputed bidi products was rejected and the duty demand with interest was upheld. The penalty was also sustained because the benefit of the notification had been wrongly availed.

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Issues: (i) Whether Notification No. 12/2014-C.E. dated 11.07.2014 was clarificatory and could be applied retrospectively to the period 17.03.2012 to 10.07.2014 so as to extend concessional duty to the disputed bidi products; (ii) Whether the penalty confirmed along with the duty demand was sustainable.

Issue (i): Whether Notification No. 12/2014-C.E. dated 11.07.2014 was clarificatory and could be applied retrospectively to the period 17.03.2012 to 10.07.2014 so as to extend concessional duty to the disputed bidi products.

Analysis: The exemption notification in force during the relevant period did not contain the relevant tariff entry for the appellants' product, and the later notification did not expressly state that it was clarificatory. The Court held that budget speeches, budget changes and departmental letters could not override the enacted notification, and that no representation had been made to the Government during the intervening period to point out any omission. In these circumstances, the later notification could not be read retrospectively, and exemption notifications had to be construed strictly.

Conclusion: The later notification was not clarificatory and operated only prospectively; the demand and interest were upheld.

Issue (ii): Whether the penalty confirmed along with the duty demand was sustainable.

Analysis: The notification during the relevant period was held to be clear and unambiguous, and the Court accepted the view that the appellants had wrongly availed the benefit of the notification. On that basis, the penalty was treated as justified.

Conclusion: The penalty was sustained.

Final Conclusion: The exemption claimed for the disputed period was rejected, the demand with interest and penalty was sustained, and all the appeals failed.

Ratio Decidendi: A later exemption notification cannot be applied retrospectively as clarificatory unless the earlier notification reveals a genuine omission or ambiguity and the later instrument or surrounding materials clearly establish that it was meant to correct that omission; exemption notifications are otherwise to be strictly construed on the basis of the enacted text.

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