High Court rules duty & penalty apply prospectively, rejecting retrospective application argument. Circular supports decision.

The High Court upheld the duty and penalty levied on the appellant, ruling that the amendment to the notification had prospective application. The appellant's argument that the amendment was clarificatory and should apply retrospectively was rejected. The Court emphasized the prospective nature of the notification based on a supporting Circular, leading to the dismissal of the appeal. Subsequently, Civil Appeal No. 855 of 2006 was also dismissed following the earlier dismissal of Civil Appeal No. 5109 of 2002.

---

---

Issues involved:
Challenge to order passed by Division Bench of Gujarat High Court dismissing writ petition against orders of Customs, Excise & (Gold) Control Appellate Tribunal, West Regional Bench, Mumbai.

Detailed Analysis:
The case involved a show cause notice issued to the appellant regarding exemption under Notification No. 208/83-C.E. Allegations included contravention of Central Excise Rules and Act leading to evasion of duty. Appellant contended no ill-intention or suppression of facts, thus penalty should not be imposed. Adjudicating Authority held duty and penalty were leviable, which was upheld by CEGAT. CEGAT ruled that the amendment to the notification on 27-3-1987 had prospective application and duty was to be reduced by the duty payable from 27-3-1987 to 31-8-1987, with the penalty reduced as well.

The appeal before the High Court reiterated the stands taken before the Adjudicating Authority and CEGAT. The High Court held that the notification was not intended to have retrospective effect, and thus dismissed the writ petition. The appellant argued that the amendment was clarificatory, contrary to the CEGAT's view of prospective application. The Circular dated 31-3-1987 supported the prospective effect of the notification, as it stated that certain products would "now" be exempt from excise duty.

The Court emphasized the meaning of "retrospective" and "retroactive" laws, highlighting that the Circular clearly indicated prospective application by using the term "now." The Court concluded that the High Court's order did not have any infirmity warranting interference, leading to the dismissal of the appeal. Consequently, Civil Appeal No. 855 of 2006 was also dismissed in view of the earlier dismissal of Civil Appeal No. 5109 of 2002.

---