1998 (12) TMI 153 - AT - Central Excise

Appeal granted for retrospective application of Central Excise Act, benefiting goods manufactured pre-order

The Tribunal allowed the appeal, holding that the order under Section 5A(2) of the Central Excise Act should apply retrospectively to goods manufactured ... Exemption - Power to grant exemption Issues Involved:Interpretation of the applicability of an order under Section 5A(2) of the Central Excise Act to goods manufactured and cleared before the issuance of the order.Detailed Analysis:Issue 1: Applicability of Section 5A(2) OrderThe primary issue in this case was whether an order issued under Section 5A(2) of the Central Excise Act would apply to goods manufactured and cleared before the order's issuance. The appellant, M/s. Khoday Engg. Ltd., contended that the order exempting excisable goods fabricated for a specific project should apply retrospectively to goods manufactured and cleared before the order's date. They cited a previous Tribunal order in their favor on similar grounds. The Commissioner, however, upheld the demand of duty, asserting that the order had prospective effect only. The central question revolved around the interpretation of the order's scope and its impact on goods produced prior to its issuance.Issue 2: Interpretation of Tribunal's Previous OrderThe Tribunal referred to a prior order, Final Order No. 1421/1996, dated 23-8-1986, which had already decided a similar matter in favor of the appellant. The Tribunal in the previous order had emphasized the special nature of the case and the public interest involved. It highlighted that the government's intention was to exempt all goods required for the project, regardless of the manufacturing date. The Tribunal drew parallels with provisions of the Customs Act, emphasizing that the purpose of exemption under Section 5A(2) of the Central Excise Act was to benefit all relevant imports, irrespective of the date of import. This interpretation supported the retrospective application of the exemption order.Final DecisionBased on the analysis of previous decisions and the interpretation of the order under Section 5A(2) of the Central Excise Act, the Tribunal allowed the appeal. The Tribunal's decision aligned with the principle that the exemption order should be applicable to all goods required for the specified project, irrespective of the manufacturing or clearance date. The ruling emphasized the public interest aspect and the intent behind the exemption order, ensuring a broad interpretation to serve the project's purpose effectively.