Prior approval as an exemption condition precedent barred retrospective duty concession for the material period.

An exemption under Notification No. 226/77 as amended by Notification No. 323/77 required prior Government approval as an independent processor before concessional duty could be claimed. Because the approval process began only after the relevant period, and there was no material showing that approval had been obtained or even sought during that period, the exemption could not be applied retrospectively. The argument that later approval related back to the date of amendment was rejected, as the concession could not operate before the statutory condition precedent was satisfied. The exemption was therefore unavailable for the material period, and the differential duty demand was sustained.

---

---

Issues: Whether the assessee was entitled to the duty exemption under Notification No. 226/77 as amended by Notification No. 323/77 during the relevant period, although approval as an independent processor was obtained only after that period.

Analysis: The amended notification made approval by the Government as an independent processor an essential requirement for availing the exemption. The approval process itself commenced only after the material period, and there was no material to show that the assessee had secured the requisite approval, or even applied for it, before the period for which differential duty was demanded. The plea that the later approval should relate back to the date of the amendment was not accepted, since the concession could not operate before the condition for its grant was fulfilled. The cited authorities on ambiguity in fiscal exemptions and on later satisfaction of statutory conditions were held inapplicable on the facts.

Conclusion: The assessee was not entitled to the exemption during the material period and the demand was sustainable against the assessee.

Final Conclusion: The appeal failed and the order denying the exemption benefit was maintained.

Ratio Decidendi: Where an exemption notification makes prior approval a condition precedent to the grant of concessional duty, the benefit cannot be claimed for a period before such approval is obtained or can validly be related back.

---