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of <h1>Court annuls excise duty demand pre-notification, citing lack of retrospective effect on 'processed fabrics' definition.</h1> The court ruled in favor of the petitioner, annulling the demand for excise duty prior to the issuance of notification Annexure P-3. The judgment ... Rayon and artificial silk fabrics dyed or printed with aid of steam - Liability to duty - Notification - Retrospective effect - Admissibility of Issues:1. Liability to pay excise duty prior to the issuance of notification Annexure P-3.2. Allegation of discriminatory treatment by the respondents.3. Claim of the respondent authorities being barred by time under Rule 10 of the Central Excise Rules.Analysis:Issue 1:The petitioner contended that they were not liable to pay excise duty before the issuance of notification Annexure P-3 as they were only dyeing and printing rayon and artificial silk fabrics with steam, not power. The court noted that prior to Annexure P-3, excise duty was levied only on processed fabrics done with power. The court found that Annexure P-3 expanded the definition of 'processed' to include fabrics dyed or printed with steam. The court held that Annexure P-3 could not have retrospective effect, citing a Supreme Court judgment. Consequently, the demand for excise duty before Annexure P-3 was deemed unsustainable, leading to the annulment of the demand.Issue 2:The petitioner alleged discriminatory treatment by the respondents in singling them out for the demand. The respondents explained that the cases cited by the petitioner were dissimilar. The court did not find merit in the respondent's argument, emphasizing the admission by the respondent authorities that fabrics dyed or printed with steam were not considered processed before Annexure P-3. The court found no discriminatory treatment and focused on the legal implications of the notifications.Issue 3:Regarding the claim being barred by time under Rule 10 of the Central Excise Rules, the respondent authorities argued that Rule 10(a) applied, not the limitation rule. The court did not delve into this issue as it found the demand unsustainable based on the retrospective effect of Annexure P-3. Therefore, the court annulled the demand without addressing the time limitation aspect.In conclusion, the court ruled in favor of the petitioner, annulling the demand for excise duty prior to the issuance of notification Annexure P-3. The judgment highlighted the legal interpretation of the notifications and the lack of retrospective effect on the expanded definition of 'processed fabrics.' The court did not address the discriminatory treatment allegation or the time limitation claim due to the unsustainable nature of the demand.
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