TaxTMI 
TaxTMI 
2023 (6) TMI 1101
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....ervice Tax, Large Tax Payers Unit, Bangalore. 2. Briefly stated the facts of the case are that the appellants are engaged in manufacture of motor vehicles such as Tractors, Trailers, Tippers and parts thereof falling under Chapter Heading 87 of the First Schedule to the Central Excise Tariff Act, 1985. During the relevant period i.e., between 2004 and 2005, they had cleared 9 Nos. of tippers valued at Rs.3,92,30,538/- involving total duty liability of Rs.63,49,514/- to M/s. Ketan Construction Ltd., a contractor who were awarded road construction maintenance project financed by World Bank. The appellants cleared the said goods by availing the benefit of exemption Notification No.108/95-CE dated 28.8.95 without payment of duty. Pursuant to....
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.... period, the Explanation-2 which was inserted by Notification No.13/2008-CE dated 1.3.2008 was not in existence, hence its application to clearances retrospectively cannot be sustained as held by the Tribunal in the aforesaid judgments. The conditions prescribed in the said Notification had been fulfilled as the goods cleared by the appellant to the said contractor were used in the said project and Revenue has not disputed its use. 3.2 Further, she has submitted that the demand is barred by limitation since the show-cause notice was issued on 9.9.2009 demanding duty for the period from 30.01.2004 to 07.03.2005. They have declared the clearances of the said goods in the ER1 returns by availing the benefit of exemption Notification and cer....
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....icial use or supplied to the projects financed by the said United Nations or an international organisation and approved by the Government of India, from the whole of - (i) the duty of excise leviable thereon under section 3 of the Central Excises and Salt Act, 1944 (1 of 1944); and (ii) the additional duty of excise leviable thereon under sub-section (1) of section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957) : Provided that before clearance of the said goods, the manufacturer produces before the Assistant Commissioner of Central Excise having jurisdiction over his factory, a certificate from the United Nations or an international organisation that the said goods are in....
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....re not withdrawn by the supplier or contractor and the expression "goods are required for the execution of the project" shall be construed accordingly." 9. The said Explanation-2 was inserted with effect from 1.3.2008. Revenue sought to apply the said Notification retrospectively and demanded duty from the appellants alleging that after completion of the project, if the 9 nos. tippers which were used in the completion of project, later if withdrawn, even after completion of the project, they would not be eligible to the benefit of the said Notification. 10. The issue of retrospective applicability of Explanation-2 to the Notification was considered by this Tribunal in the case of L & T Komatsu Ltd. (supra) in paragraph 5, which is as ....
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....rat High Court's judgment was followed, this Court noticed that explanation was not held to be a declaratory one but thereby the scope of Section 9(1)(ii) of the Act was widened. The law in the aforementioned premise was laid down as under: "17. As was affirmed by this Court in Goslino Mario (supra), a cardinal principle of the tax law is that the law to be applied is that which is in force in the relevant assessment year unless otherwise provided expressly or by necessary implication. [See also: Reliance Jute and Industries v. CIT [(1980) 1 SCC 139]. An Explanation to a statutory provision may fulfil the purpose of clearing up an ambiguity in the main provision or an Explanation can add to and widen the scope of the main section (....
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....s, therefore, evident that by reason of an explanation, a substantive law may also be introduced. If a substantive law is introduced, it will have no retrospective effect." 5.3.1 Further we quote from CESTAT Ahmedabad's decision in the case of Silara Exports Ltd. (supra) as below: "3. .........The notification as it existed prior to introduction of explanation was interpreted while considering and quashing the Circular No. 38/2000 by two High Courts. Therefore obvious conclusion that emerges is that even though the explanation starts with the clause "for the removal of doubts it is hereby clarified" it cannot have retrospective effect. (Emphasis supplied). In view of the fact that both the decisions of the High Courts cove....