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AI Drafter - (New and Powerful) ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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Issues: Whether exemption under Notification No. 208/83-C.E. could be denied merely because the inputs were received on gate passes showing nil duty, and whether the subsequent amendment excluding exempted or nil-duty inputs operated retrospectively.
Analysis: The applicable proviso required that the inputs should be goods on which duty of excise or additional duty had already been paid. The inputs in the present case were received on nil-duty gate passes, but during the relevant period the notification did not expressly exclude such inputs. The later amendment of 01-03-1989 specifically denying the benefit where inputs were exempted or cleared at nil rate introduced a new condition, and there was no basis to apply it retrospectively to the assessee's earlier clearances.
Conclusion: The benefit of Notification No. 208/83-C.E. could not be denied solely because the inputs were cleared at nil duty during the relevant period. The issue is decided in favour of the assessee.
Final Conclusion: The exemption was held admissible for the period in dispute, and the demand and penalties based on denial of that benefit could not survive.
Ratio Decidendi: A later amendment creating an express exclusion for exempted or nil-duty inputs cannot be applied retrospectively to deny an exemption where no such exclusion existed during the relevant period.
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