Clarificatory exemption notification applied retrospectively, supporting waiver of duty demand and stay of recovery pending appeal.

Exemption under Notification No. 90/88-C.E. was withdrawn by Notification No. 202/88-C.E. and later restored by Notification No. 170/89-C.E. The later notification was treated as clarificatory and capable of retrospective operation, so the exemption position was taken to apply for the relevant period. On that basis, the balance of convenience favoured the assessee, leading to waiver of the total duty demand and stay of recovery pending appeal.

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Issues: Whether waiver of the duty demand and stay of recovery were justified in view of the exemption notifications and the later notification restoring the exemption.

Analysis: The goods had initially been exempted under Notification No. 90/88-C.E. The exemption was withdrawn by Notification No. 202/88-C.E. and later restored by Notification No. 170/89-C.E. The Tribunal had already treated Notification No. 170/89-C.E. as clarificatory in nature and therefore capable of retrospective operation. On that basis, the balance of convenience was found to lie in favour of the appellants.

Conclusion: Waiver of the total duty demand was granted and recovery of the amount was stayed during the pendency of the appeal, in favour of the assessee.

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