Retrospective exemption for captively consumed goods supported unconditional stay of pre-deposit demand

Retrospective exemption legislation and Notification No. 217 were treated as prima facie extending duty protection to captively consumed goods for the period between 01.03.1986 and 02.04.1986, because notifications issued during the relevant window were deemed effective from 01.03.1986. The earlier exemption regime under Notification No. 118/75 had been rescinded with the new tariff structure, but the same exemption principle was reintroduced and the status quo ante was regarded as undisturbed. On that basis, the applicants were held entitled to unconditional stay of the pre-deposit demand.

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Issues: Whether the retrospective exemption enactment and Notification No. 217 dated 02.04.1986 prima facie protected captively consumed goods from duty for the period 01.03.1986 to 02.04.1986, justifying waiver of pre-deposit.

Analysis: The order notes that Notification No. 118/75 stood rescinded with the new tariff regime from 01.03.1986, but the same exemption principle was reintroduced by Notification No. 217 dated 02.04.1986. The retrospective legislation provided that notifications issued between 03.03.1986 and 08.08.1986 were to be deemed effective from 01.03.1986. On that basis, the captively consumed goods were treated as prima facie covered by the retrospective protection, and the earlier status quo ante was regarded as not disturbed.

Conclusion: The applicants were entitled to unconditional stay of the pre-deposit demand, and the issue was decided in favour of the applicants.

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