Retrospective construction of exemption notification preserved excise duty exemption for covered clearances despite an intervening restrictive notification.

An exemption notification restoring the higher excise duty exemption limit for clearances during 1 April 1985 to 31 March 1986 was construed as covering the earlier period despite its issue on 25 March 1986. On that reading, the later notification operated retrospectively to the extent needed to overcome the inconsistency with the intervening restrictive notification, and the covered clearances remained exempt. The contrary narrow construction, based on the separate last-part-of-month notification, was rejected because it did not match the express language of the exemption notification. The assessee therefore retained exemption and the duty demand could not stand.

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Issues: Whether the petitioner was entitled to excise duty exemption for clearances made between 1 March 1986 and 24 March 1986 in view of the later notification restoring the exemption limit, and whether the contrary view based on the intervening notification could be sustained.

Analysis: The relevant exemption notification restored the higher exemption limit for clearances from 1 April 1985 to 31 March 1986. Though issued on 25 March 1986, its language covered the entire period and therefore operated retrospectively to the extent necessary to preserve the exemption. On that construction, the later notification prevailed over the inconsistent earlier notification and the clearances within the permitted limit remained exempt. The contrary restrictive reading, based on the separate notification dealing with the last part of the month, was rejected as inconsistent with the express words of the exemption notification.

Conclusion: The petitioner was entitled to exemption from duty for the relevant clearances, and the order levying duty could not stand on that basis.

Ratio Decidendi: Where an exemption notification expressly covers an earlier period and is inconsistent with an earlier restrictive notification, it must be construed as operating retrospectively to the extent of the inconsistency and the assessee retains the exemption for the covered clearances.

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