Prospective export exemption and limitation under excise law upheld for goods cleared to Nepal

Goods cleared to Nepal were treated as dutiable clearances for the period in dispute, and later amendments allowing export in bond without duty were held to be substantive and prospective only, so they did not apply retrospectively to the July 1990 clearances. The amendment to the SSI notification was also held inapplicable to that period, leaving the duty liability intact. On limitation, the relevant date was the due date for filing the required RT-12 return because duty on Nepal clearances carried a return obligation; on that basis, the notice issued on 18-1-1991 was within time. The demand was therefore not barred by limitation.

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Issues: (i) Whether goods cleared to Nepal were liable to duty as clearances for home consumption and whether the subsequent amendment to the exemption/export regime operated retrospectively. (ii) Whether the demand was barred by limitation.

Issue (i): Whether goods cleared to Nepal were liable to duty as clearances for home consumption and whether the subsequent amendment to the exemption/export regime operated retrospectively.

Analysis: The Tribunal followed earlier decisions holding that clearances to Nepal were not exempt from duty for the period in dispute. The later amendment to permit export in bond without payment of duty was treated as a substantive change operating prospectively only, and could not govern the period of clearance in July 1990. The amendment to the SSI notification was likewise held inapplicable to the disputed period.

Conclusion: The duty liability on clearances of goods to Nepal was upheld against the assessee.

Issue (ii): Whether the demand was barred by limitation.

Analysis: Though duty was not required on ordinary home-consumption clearances below the exemption threshold, clearances to Nepal attracted a duty liability and the corresponding obligation to file RT-12 returns. The relevant date for limitation was therefore the date on which the RT-12 return was required to be filed, and on that basis the notice issued on 18-1-1991 was within time under Section 11A(3)(ii)(a)(A) of the Act.

Conclusion: The demand was held to be within limitation.

Final Conclusion: The impugned order was sustained and the appeal failed in full.

Ratio Decidendi: A later amendment enlarging export-related exemption is prospective when it effects a substantive change, and for limitation under the excise scheme the relevant date is the due date for filing the required return where such return was statutorily obligated.

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