Prospective operation of tariff amendment: conversion of plastic forms was treated as manufacture only from the amendment date.

Chapter Note 6 to Chapter 39 of the Central Excise Tariff, inserted from 1-3-1988, was held to be a substantive change and not a clarificatory amendment. The earlier note limited the relevant headings to goods produced by chemical synthesis, whereas the amended note treated conversion from one primary form of plastic to another as manufacture. Because the processes involved were mechanical conversions rather than chemical synthesis, the amendment created a new liability and, absent express or clearly implied retrospective intent, operated only prospectively. The issue was answered in favour of the assessees.

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Issues: Whether the amendment to Chapter Note 6 of Chapter 39 of the Central Excise Tariff, inserted with effect from 1-3-1988, was clarificatory and retrospective or a new provision operating prospectively, and whether conversions from one primary form of plastic to another amounted to manufacture before that date.

Analysis: Note 6, as amended, opened with a non obstante clause overriding Note 3. The earlier and amended notes dealt with different positions: Note 3 limited the relevant headings to goods produced by chemical synthesis, while the amended Note 6 declared conversion from one primary form to another to be manufacture. Since the processes in question were mechanical conversions and not chemical synthesis, the amendment created a substantive change rather than merely explaining an existing ambiguity. A new provision does not operate retrospectively unless such intent is expressed or clearly implied.

Conclusion: The amendment to Chapter Note 6 was not clarificatory and operated only prospectively. The issue was answered in favour of the assessees.

Ratio Decidendi: A statutory amendment that creates a new substantive liability, especially when it overrides an earlier contrary provision by a non obstante clause, is prospective unless retrospective intent is expressly stated or necessarily implied.

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