Retrospective excise amendment sustained duty on captive consumption; PVC sheets fell outside the exemption notification.

Retrospective amendment of the Central Excise Rules, read with the related finance enactment, authorised duty on goods captively consumed within the factory. The prior appellate order did not decide the exemption question and did not bar examination of duty liability. On the product description, the goods emerging from calendering were wider PVC sheets later slit into strips, not PVC tapes of the narrower width covered by Notification No. 68/71-C.E. As the goods did not strictly answer the notification description, exemption was correctly denied and the duty demand was sustained.

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Issues: (i) Whether the retrospective amendment of the excise rules permitted levy of duty on goods captively consumed. (ii) Whether the goods manufactured by the assessee were PVC tapes entitled to exemption under Notification No. 68/71-C.E. or PVC sheets outside its scope.

Issue (i): Whether the retrospective amendment of the excise rules permitted levy of duty on goods captively consumed.

Analysis: The amendment to Rules 9 and 49 of the Central Excise Rules, 1944, read with the retrospective operation of the relevant finance enactment, made duty recoverable even on goods consumed within the factory. The earlier appellate order did not decide the exemption issue and therefore did not prevent examination of duty liability on the present claim.

Conclusion: Duty could validly be levied on goods captively consumed.

Issue (ii): Whether the goods manufactured by the assessee were PVC tapes entitled to exemption under Notification No. 68/71-C.E. or PVC sheets outside its scope.

Analysis: On the manufacturing process, the material emerged from calendering as a width of about 24" to 26" and was only thereafter slit into narrower strips. The notification covered PVC tapes of about 1" to 21/2" width, whereas the claim was made in respect of sheets of 2 feet and above. The earlier order contained no finding that the disputed goods were tapes or that they were eligible for exemption.

Conclusion: The goods were PVC sheets and not PVC tapes, so the exemption was correctly denied.

Final Conclusion: The denial of exemption and the consequent duty demand were upheld, and the appeal failed.

Ratio Decidendi: Retrospective amendment can sustain duty on captive consumption, but exemption is available only when the goods strictly answer the description in the notification.

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