Retrospective excise exemption covers input duty relief notifications preserving pre-change duty incidence, making refund claims admissible.

Notifications issued under Rule 8(1) of the Central Excise Rules, 1944 that preserve the effective incidence of duty after tariff changes are covered by the Central Duties of Excise (Retrospective Exemption) Act, 1986. The Tribunal treated the set-off notifications as input duty relief measures intended to maintain pre-28-2-1986 duty levels, and held that they operated retrospectively from 1-3-1986. On that basis, the corresponding refund claim was admissible with consequential relief.

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Issues: Whether the set-off notifications granting input duty relief were covered by the Central Duties of Excise (Retrospective Exemption) Act, 1986, so as to entitle the assessee to retrospective exemption and refund.

Analysis: The applicable statutory scheme deemed certain notifications issued under Rule 8(1) of the Central Excise Rules, 1944 to operate from 1-3-1986 if they were issued to maintain the effective rates of excise duty at the pre-28-2-1986 level. The Tribunal held that the notifications in question were in substance input duty relief notifications intended to preserve the incidence of duty after the tariff changes, and were therefore within the retrospective exemption enactment. It further followed the consistent Special Bench view and declined to follow the contrary South Regional Bench view as per incuriam.

Conclusion: The retrospective exemption Act applied to the notifications, and the assessee was entitled to refund with consequential relief.

Ratio Decidendi: A notification issued under Rule 8(1) of the Central Excise Rules, 1944 to preserve the effective duty incidence after tariff changes is covered by the Central Duties of Excise (Retrospective Exemption) Act, 1986 and operates retrospectively from 1-3-1986, making the corresponding refund claim admissible.

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