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of <h1>Court grants appellant tax exemption under Notification No. 234/86, emphasizes fairness in tax law application.</h1> <h3>UNICHEM LABORATORIES LTD. Versus COLLECTOR OF CENTRAL EXCISE, BOMBAY</h3> UNICHEM LABORATORIES LTD. Versus COLLECTOR OF CENTRAL EXCISE, BOMBAY - 2002 (145) E.L.T. 502 (SC), 2002 AIR 3158, 2002 (2) Suppl. SCR 87, 2002 (7) SCC ... Issues:- Interpretation of Notification No. 234/86 granting exemption to bulk drugs under the Central Excise Tariff Act, 1985.- Claim of exemption under the notification at the time of filing classification lists.- Applicability of the notification to the appellant's case.- Retroactive effect of the notification under the Central Duties of Excise (Retrospective Exemption) Act, 1986.- Fairness in denying the benefit of the notification to the appellant.Analysis:The primary issue in this case revolves around the interpretation of Notification No. 234/86, which granted exemption to bulk drugs under Chapter 28 or Chapter 29 of the Central Excise Tariff Act, 1985. The notification required the manufacturer to furnish a certificate from the Drugs Controller of the Government of India within a specified period to claim the exemption. The appellant, a manufacturer of bulk drugs, sought the benefit of this notification after filing classification lists under the Act, prompting a dispute with the authorities regarding the timing of the claim for exemption.The court analyzed the notification's provisions, noting that no specific time limit was set for filing the certificate from the Drugs Controller. It emphasized that the benefit of the exemption should be available to the appellant from the date of filing the classification lists, especially considering that the notification was issued after the appellant filed the lists. The court highlighted that the appellant correctly indicated the duty payable at 15% without claiming the exemption initially due to changes in the tariff system brought about by the Central Excise Tariff Act, 1985.Furthermore, the court examined the retroactive effect of the notification under the Central Duties of Excise (Retrospective Exemption) Act, 1986. It cited Section 2 of the Act, which deemed notifications issued between specific dates to have retrospective effect, thereby entitling the appellant to the benefit of Notification No. 234/86 from March 1, 1986. The court emphasized the importance of fairness in applying tax laws, stating that authorities must act reasonably and protect the interests of both the revenue and the taxpayer.In conclusion, the court held that denying the benefit of the notification to the appellant was unfair and set aside the previous order. It ruled in favor of the appellant, declaring them entitled to the exemption under Notification No. 234/86 from March 1, 1986, the date of filing the classification lists. The appeal was allowed, with no costs imposed on either party.
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