Trade notice cannot defeat a separate excise exemption once statutory conditions are satisfied, and notices based on that premise fail.

Separate central excise exemption under Notifications No. 198/76-C.E. and 216/76-C.E. could be claimed for grease proof paper and glassine paper once the earlier exemption under Notification No. 42/73-C.E. ceased and the replacement Notification No. 129/77-C.E. did not cover those goods, provided the prescribed clearance condition was satisfied. On the stated facts, that condition was met from 30.09.1977, so the concessional rate applied and the refund already granted was not shown to be inadmissible. Show cause notices based on a trade notice were unsustainable because a trade notice cannot control quasi-judicial decision-making, and notices founded on the erroneous premise that the later exemption was unavailable were without jurisdiction.

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Issues: (i) Whether the petitioner was entitled to the benefit of Notification No. 198/76-C.E. dated 16.06.1976 and Notification No. 216/76-C.E. dated 24.07.1976 for grease proof paper and glassine paper after the earlier exemption under Notification No. 42/73-C.E. dated 01.03.1973 ceased and Notification No. 129/77-C.E. dated 18.06.1977 did not extend to those goods; (ii) Whether the show cause notices seeking recovery of refund and demanding duty, issued on the basis of a trade notice, were sustainable.

Issue (i): Whether the petitioner was entitled to the benefit of Notification No. 198/76-C.E. dated 16.06.1976 and Notification No. 216/76-C.E. dated 24.07.1976 for grease proof paper and glassine paper after the earlier exemption under Notification No. 42/73-C.E. dated 01.03.1973 ceased and Notification No. 129/77-C.E. dated 18.06.1977 did not extend to those goods

Analysis: The exemption under Notification No. 42/73-C.E. was replaced by Notification No. 129/77-C.E., and the latter did not cover grease proof paper and glassine paper. Once that earlier benefit ceased to apply, the petitioner was not barred from seeking the separate concession under Notification No. 216/76-C.E., provided the condition of clearances in excess of base clearances was satisfied. The record showed that this condition was met from 30.09.1977, and the concessional rate was thereafter rightly applied. The earlier refund related only to the period when the petitioner had become entitled to the later notification and did not overlap with the period covered by the superseded exemption.

Conclusion: The petitioner was entitled to the benefit of Notification No. 198/76-C.E. and Notification No. 216/76-C.E. from 30.09.1977, and the refund already granted was not shown to be inadmissible.

Issue (ii): Whether the show cause notices seeking recovery of refund and demanding duty, issued on the basis of a trade notice, were sustainable

Analysis: The impugned notices were founded on a trade notice that treated a manufacturer availing one concession as wholly disentitled from the separate concession under the later notifications. Such directions in a trade notice do not bind the Assistant Collector in the exercise of quasi-judicial powers. Since the underlying premise that the petitioner could not invoke the later exemption was erroneous, the notices were issued on a faulty and jurisdictionally unsustainable basis.

Conclusion: The show cause notices were unsustainable and liable to be quashed.

Final Conclusion: The petition succeeded and all four show cause notices were quashed, leaving no order as to costs.

Ratio Decidendi: A trade notice cannot control the exercise of quasi-judicial authority, and where the statutory notifications permit a separate exemption once the relevant conditions are satisfied, notices issued on an erroneous contrary premise are without jurisdiction.

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