Retrospective exemption notifications: pre-amendment clearances stay in eligibility calculations, and exempt goods remain excisable goods.

Explanation V inserted on 17-7-1979 operated prospectively because the amendment notification contained no express or implied retrospective effect, so exempt clearances made before that date could not be excluded from the prior year's computation of eligibility under Notification No. 89/79. The Tribunal further held that goods exempted under a Rule 8 notification remain excisable goods; exemption only suspends levy and does not alter the character of the goods. As a result, the assessee could not claim the earlier exempt clearances were of the eligibility calculation, and the refund claim failed.

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Issues: Whether Explanation V inserted by amendment notification on 17-7-1979 operated retrospectively so as to exclude exempt clearances for the preceding financial year from the computation of eligibility under Notification No. 89/79, and whether goods exempted under a Rule 8 notification ceased to be excisable goods.

Analysis: The amendment notification contained no express provision giving Explanation V retrospective effect. The normal rule applied that a notification or amendment operates only from the date of its issue unless retrospectivity is clearly provided for or necessarily implied. The Explanation could not be read backwards to alter the computation of clearances for the earlier period. The Tribunal also held that goods exempted by a notification under Rule 8 do not cease to be excisable goods; exemption only suspends the levy for the time being and does not convert the goods into non-excisable goods.

Conclusion: Explanation V was prospective from 17-7-1979 and the assessee was not entitled to treat exempt clearances made before that date as excluded for computing eligibility under Notification No. 89/79. The challenge to the refusal of refund failed.

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