Exemption notifications are not retrospective absent express wording, and tow-stage duty remained payable under the one-stage levy scheme.

Where the duty structure contemplated levy at only one stage, exemption of the final polyester fibre product did not extinguish liability at the intermediate tow stage if duty had not been paid at the fibre stage. The Court held that the Revenue could validly demand duty on tow, and rejected the contention that exemption under Notification No. 191/85 displaced that liability. It further held that Notification No. 76/92 was a fresh exemption and, absent express words, could not operate retrospectively or as a merely clarificatory measure. The demand was sustained and the retrospective effect plea failed.

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Issues: Whether duty was payable on tow when polyester fibre manufactured from it was exempted under Notification No. 191/85, and whether Notification No. 76/92 could operate retrospectively.

Analysis: The duty scheme contemplated levy at one stage only, either at the tow stage or at the polyester fibre stage. Since duty had not been paid at the fibre stage, the Revenue was entitled to demand duty at the tow stage. The Tribunal's view that exemption at the fibre stage displaced duty on tow was rejected. The later Notification No. 76/92 was a fresh exemption and, in the absence of express words, could not be treated as retrospective or merely clarificatory.

Conclusion: The demand on tow was sustainable and the plea of retrospective effect of Notification No. 76/92 failed, both in favour of the Revenue.

Final Conclusion: The appeal succeeded, the Tribunal's order was set aside, and the order of the Commissioner (Appeals) was restored.

Ratio Decidendi: An exemption notification does not operate retrospectively unless such intention is expressly indicated, and where a duty structure contemplates levy at one stage only, non-payment at the exempted final stage does not extinguish liability at the intermediate stage.

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