Retrospective excise notification amendments cannot enlarge liability without clear authority; prior-period demand on processed fabrics failed.

An amended excise exemption notification was held to be a substantive amendment, not a mere clarification, because it broadened the meaning of "processed" rayon or artificial silk fabrics to include processes carried on with power or steam, subject only to the stated exclusion for calendering with plain rollers. Since the authorities had earlier treated fabrics dyed or printed without power or with steam as outside the processed category, the later notification could not be applied retrospectively to enlarge liability for the prior period. The demand raised on that basis was therefore unsustainable.

---

---

Issues: Whether the amended excise notification could operate retrospectively so as to make the petitioner liable to duty for the prior period on dyed and printed rayon or artificial silk fabrics processed with steam, and whether the demand raised on that basis was sustainable.

Analysis: The earlier notification exempted rayon or artificial silk fabrics from duty in the manner stated therein, while the later notification expressly amended the earlier one by adding an explanation that broadened the meaning of "processed" to include processes ordinarily carried on with the aid of power or steam, excluding only calendering with plain rollers. The pleadings showed that the excise authorities themselves had understood the earlier notification as applying only to fabrics processed with the aid of power, and that goods dyed or printed without the aid of power or with steam were not treated as processed fabrics. On that basis, the later notification was held to be an amendment and not a mere clarification, and it could not be given retrospective effect to enlarge the scope of the earlier exemption notification.

Conclusion: The amended notification could not operate retrospectively, and the demand based on it for the period prior to its issue was unsustainable.

Ratio Decidendi: A notification issued by way of amendment under the excise exemption power cannot retrospectively enlarge the taxable or exempted category unless such retrospective operation is clearly authorised.

---