Clarificatory exemption amendment held retrospective, preserving Notification No. 217/86 benefit for the disputed period.

An amendment to Notification No. 217/86, excluding inputs used in final products cleared at nil duty, was treated as clarificatory and therefore retrospective. On that basis, the amended exclusion did not defeat exemption for the disputed period covered by the show cause notices, and the denial of benefit was found unsustainable. The assessee was consequently regarded as entitled to the notification benefit for that period.

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Issues: Whether the amendment to Notification No. 217/86, by which inputs used in the manufacture of final products cleared at nil rate of duty were excluded, was clarificatory and retrospective so as to entitle the assessee to the benefit of the notification for the disputed period.

Analysis: The Tribunal noted that the earlier decision on an identical amendment to Notification No. 217/86 had treated the change as clarificatory in nature and therefore retrospective in effect. Since the controversy turned on the same exemption notification and the same nature of amendment, the later view was applied to the present dispute. The denial of the benefit was thus found unsustainable for the period covered by the show cause notices.

Conclusion: The amendment was held to operate retrospectively and the assessee was held entitled to the benefit of Notification No. 217/86.

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