Special rate under exemption notifications must be considered on merits where delay objection is not fairly sustainable.

The exemption notifications allowed a manufacturer to opt out of the prescribed table rate and seek fixation of a special rate on actual value addition. In the circumstances of prolonged litigation and interim orders, the Court treated the application as having arisen only after the Supreme Court's final decision and found it was filed within a reasonable time thereafter. The 30 September stipulation was read as a procedural measure, not an absolute bar, and the department's earlier agreement to consider the request weighed against a limitation objection. The rejection for delay was not sustained, and the Principal Commissioner was directed to decide the application on merits.

---

---

Issues: Whether the assessee's application for fixation of a special rate under the exemption notifications could be rejected as time-barred and whether the authority was required to decide the application on merits.

Analysis: The notifications conferred on the manufacturer an option not to accept the prescribed table rate and to seek fixation of a special rate based on actual value addition. The Court noted that, in the peculiar sequence of litigation and interim orders, the occasion to make such a request had effectively arisen only after the Supreme Court's final decision, and the application was filed within a reasonable time thereafter. The 30 September stipulation was treated as a procedural streamlining measure rather than a bar that could defeat consideration of the claim in the circumstances of the case. The Court also observed that the department had earlier agreed to consider the application, and the objection based on limitation could not fairly be raised at that stage.

Conclusion: The rejection of the application on the ground of delay was not sustained, and the Principal Commissioner was directed to consider the application on its merits.

---