Retrospective excise exemption for cycle accessories defeated the duty demand on chain covers.

Retrospective exemption under Section 11C of the Central Excises and Salt Act, 1944 was applied to cycle accessories under Tariff Item 68 for the period from 19 June 1980 to 17 March 1985, and the demand fell within that exempt span. The analysis also noted that, even if a chain cover were treated only as a cycle part, it was covered by Notification No. 234/82-C.E., as amended from time to time. On that basis, the excise demand was held unsustainable and the assessee succeeded.

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Issues: Whether chain covers were entitled to exemption from central excise duty for the relevant period in view of the retrospective exemption issued under Section 11C of the Central Excises and Salt Act, 1944.

Analysis: The notification under Section 11C was found to be undisputed and was applied to cycle accessories falling under Tariff Item 68 for the period from 19 June 1980 to 17 March 1985. The relevant period of demand fell within that exempt span. Even on the assumption that chain cover was only a cycle part, it was also covered by Notification No. 234/82-C.E. dated 1 November 1982 as amended from time to time.

Conclusion: The demand was not sustainable and the appeal was allowed in favour of the assessee.

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