Retrospectivity in fiscal notifications denied; proforma credit was also refused for inputs linked to waste and non-excisable products.

A fiscal notification cannot be treated as retrospective in the absence of express language or necessary implication, so Notification No. 102/81 did not extend the set-off benefit under Notification No. 201/79 to periods before 11.4.1981. The Tribunal also held that proforma credit on duty-paid inputs was not admissible under Notification No. 201/79 merely because those inputs were used in relation to waste, by-products or non-excisable products; the scheme of that notification could not be expanded by importing reasoning from Rule 56-A or a different judicial context. The Revenue's challenge succeeded and the relief granted below was set aside.

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Issues: (i) Whether Notification No. 102/81 could be treated as retrospective so as to extend the benefit of set-off under Notification No. 201/79 to periods prior to 11.4.1981; (ii) whether, under Notification No. 201/79, proforma credit on duty paid inputs was admissible where the inputs were used in relation to waste, by-products or non-excisable products.

Issue (i): Whether Notification No. 102/81 could be treated as retrospective so as to extend the benefit of set-off under Notification No. 201/79 to periods prior to 11.4.1981.

Analysis: The amendment brought in by Notification No. 102/81 did not contain any indication that it was to operate retrospectively. Rule 56-A of the Central Excise Rules, 1944 and Notification No. 201/79 were treated as different enactments, and the procedural parity suggested by the assessee could not justify importing the amendment in one into the other. In the absence of express language or necessary implication, retrospectivity could not be inferred.

Conclusion: The amendment was not retrospective, and the assessee could not claim the extended benefit for the earlier period.

Issue (ii): Whether, under Notification No. 201/79, proforma credit on duty paid inputs was admissible where the inputs were used in relation to waste, by-products or non-excisable products.

Analysis: The relevant question was whether the set-off was available merely because duty paid inputs were used in the manufacture process, even where the resulting waste, by-product or product was exempt or non-excisable. The Tribunal held that the benefit under Notification No. 201/79, as it stood before the amendment, did not extend to such situations in the manner accepted by the lower appellate authority. The reliance placed on Rule 56-A and the Bombay High Court decision was distinguished because that case turned on the language of Rule 56-A and not on Notification No. 201/79.

Conclusion: Proforma credit was not admissible on the disputed quantity in the manner claimed by the assessee, and the demand was sustainable.

Final Conclusion: The Revenue's challenge succeeded, the appellate relief granted below was set aside, and the assessee's cross objection did not survive.

Ratio Decidendi: Retrospective effect cannot be attributed to a fiscal notification in the absence of express indication, and the terms of one enactment or notification cannot be imported into another merely because they are said to be similar in scheme.

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