Prospective exemption amendment and duty quantification: exemption for supplies to a 100% export oriented unit applied only from the amendment date.

Notification No. 123/81 did not, before 1-3-1992, extend exemption to goods captively consumed in manufacture for supply to a 100% export oriented unit; the amendment enlarging that exemption was treated as prospective, so duty remained payable for the earlier period. A duty demand was not invalid merely because the show cause notice and earlier orders did not specify the exact amount, where the relevant particulars were within the assessee's special knowledge and had not been furnished. The demand was upheld, but the appellate authority was directed to redetermine the correct quantum after hearing the assessee.

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Issues: (i) Whether the exemption under Notification No. 123/81 extended to goods captively consumed in the manufacture of goods supplied to a 100% export oriented unit before the amendment of 1-3-1992. (ii) Whether the demand for duty was invalid because the show cause notice and consequential orders did not quantify the duty payable.

Issue (i): Whether the exemption under Notification No. 123/81 extended to goods captively consumed in the manufacture of goods supplied to a 100% export oriented unit before the amendment of 1-3-1992.

Analysis: The exemption, as it stood at the relevant time, did not cover clearances to a 100% export oriented unit. The later amendment from 1-3-1992 expressly enlarged the scope to include such clearances. The Tribunal applied the same approach as in the interpretation of Rule 57C of the Central Excise Rules, 1944, where an identical amendment was held to operate prospectively. The amendment to Notification No. 123/81 was therefore treated as prospective and not retrospective.

Conclusion: The exemption was not available for the period prior to 1-3-1992, and the product remained liable to duty.

Issue (ii): Whether the demand for duty was invalid because the show cause notice and consequential orders did not quantify the duty payable.

Analysis: The absence of an exact quantification in the notice or earlier orders did not make the demand illegal in the facts of the case. The assessee had not furnished the necessary particulars, and the relevant information was within its special knowledge. In those circumstances, the department could not be faulted for not specifying the exact amount earlier. At the same time, fairness required that the correct amount be worked out after considering the materials produced by the assessee.

Conclusion: The demand was valid, but the quantification had to be redetermined by the appellate authority after hearing the assessee.

Final Conclusion: The appeal succeeded to the limited extent that the impugned order was set aside and the matter was sent back only for quantification, while the duty liability itself was upheld.

Ratio Decidendi: An amendment enlarging an exemption to cover clearances to a 100% export oriented unit is prospective when the prior text did not include such clearances, and a duty demand is not invalid merely because the exact amount was not quantified where the necessary facts were within the assessee's special knowledge.

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