C.N Ramachandran Nair, J.:— These connected appeals filed under Section 35G of the Central Excise Act are against the common order of the Customs, Excise & Service Tax Appellate Tribunal holding that respondents are entitled to benefit of Annexure-B notification issued by Government of India on 11-8-2003 retrospectively from 1-4-2003. Respondents are limited companies mainly engaged in manufacture of tread rubber. Besides producing and clearing excisable goods on their own account, these companies are engaged in manufacturing and processing of goods for other parties including tyre companies on job work basis. Notification No. 9/2003-CE. issued on 1-3-2003 provides concessional rate of duty at 60% of normal rate of duty for first clearances up to rupees one crore and exemption from payment of duty for clearances of specified goods under certain conditions. The benefit of concession and exemption under Clause 2(vi) of this notification is available only if the aggregate value of clearances of all excisable goods for home consumption by a manufacturer from one or more factories, or from a factory by one or more manufacturers, does not exceed rupees three hundred lakhs in the preceding financial year. There is no dispute that the aggregate value of clearances of all excisable goods for home consumption includes value of goods manufactured and cleared on job work basis also. Since the respondents' total clearances including value of goods cleared on job work basis exceeded Rs. 3 crores during the preceding financial year, respondents were not entitled to benefit of notification in the form of concession and exemption from duty. However, the Government in exercise of powers conferred under Section 5A(1) of the Central Excise Act, issued Annexure-B Notification on 11-8-2003, whereunder Annexure-A, Notification No. 9/03, is amended introducing Clause (e) to Clause 3A of Notification No. 9/03. Clause, 3A of Notification No. 9/03 introducing clause (e) is extracted hereunder for easy reference.
“3A. For the purposes of determining the aggregate value of clearances of all excisable goods for home consumption, mentioned in clause (vii) of paragraph 2 of this notification, the following clearances shall not be taken into account namely:—
(a)……………
(b) …………….
(c) ………………
(d)…………………
(e) clearances, which are exempt from the whole of the excise duty le viable thereon under notifications No. 214/86-Central Excise, dated the 25th March, 1986 [G.S.R 547(E), dated the 25th March, 1986], or No. 83/94- Central Excise, dated the 11th April, 1994 [G.S.R 375(E), dated the 11th April, 1994], or No. 84/94-Central Excise, dated the 11th April, 1994 [G.S.R 376(E), dated the 11th April, 1994].”
Notification No. 214/86 referred to in the clause above provides for exemption of duty on goods cleared on job work basis. Consequent upon this amendment to Notification No. 9/03, the aggregate value of clearances in the preceding year for the purpose of exemption/concession will be reckoned after excluding the value of goods cleared on job work basis. By excluding the turnover of value of clearances on job work of both the respondents for the previous financial year, both the respondents are eligible for concession/exemption under Notification No. 9/03. However, since the benefit accrued to respondents by Annexure-B Notification was issued on 11-8-2003, the Department granted the benefit only with effect from that date. Consequently, respondents are called upon to pay duty at normal rate for goods cleared up to 10-8-2003. Even though, the first appeal filed against the demand of duty was unsuccessful, respondents filed second appeal before the Tribunal. The Tribunal allowed the appeal holding that Annexure-B Notification applies to the previous financial year also, even though the same was issued only on 11-8-2003. It is against this common order of the Tribunal, the Commissioner of Central Excise has filed these appeals.
2. We have heard Shri P. Parameswaran Nair, Assistant Solicitor General, appearing for appellant and Shri Joseph Kodiyathara, appearing for respondents.
3. Learned counsel appearing for appellant contends that Annexure-B notification is in force only prospectively and therefore, the benefit of notification granted to respondents by the Tribunal retrospectively from the beginning of the financial year is illegal and arbitrary. On the other hand, learned counsel for respondents contended that exemption is with reference to previous year's turnover and when Annexure-B Notification was issued excluding the value of clearances made on job work basis on the turnover, respondents are entitled to have concession/exemption under Notification No. 9/03 and the basis of liability under the Notification though changed by Annexure-B Notification dated 11-8-2003, it applies from 1-4-2003 onwards. He has also referred to the decision of the Supreme Court in Mangalore Chemicals & Fertilizers Ltd. v. Deputy Commissioner reported in 1991 (55) E.L.T 437, whereunder the Supreme Court has held that notification granting exemption should be given wide and liberal construction. We are unable to agree with the finding of the Tribunal that prospectivity of notification has no relevance. In fact, the scope of a notification has to be considered with reference to the statutory provisions under which it is issued. It is the admitted position that, without Annexure-B Notification, the respondents would not have been benefited by Annexure-A Notification providing for concession/exemption of duty. We find that Annexure-A Notification, No. 9/03, and the notification amending it, namely Annexure-B Notification issued on 11-8-2003, were issued by the Government of India in exercise of powers conferred under Section 5A(1) of the Central Excise Act. Clause (5) to Sec. 5A is as follows:—
5A (5): “Every notification issued under sub-section (1) or sub Sec. 2(A)) shall—
(a) unless otherwise provided, come into force on the date of its issue by the Central Government for publication in the Official Gazette,
(b) also be published and offered for sale on the date of its issue by the Directorate of Publicity and Public Relations, Customs and Central Excise, New Delhi, under the Central Board of Excise and Customs constituted under the Central Boards of Revenue Act, 1963.”
It is clear from the above clause that unless otherwise provided, notification issued under Section 5A(1) will come into force on the date of it's issue. Since Annexure-B Notification amending Annexure-A Notification does not provide for retrospectivity, it comes into force on the date of issue, namely 11-8-03, as provided under Clause (5)(a) to Section 5A of the Central Excise Act. In fact, this means that respondents are not entitled to benefit of amendment to Annexure-A Notification (No. 9/03) up to 10-8-2003 and are liable to pay duty at normal rate for clearances made up to that date. However, by virtue of exclusion of job work turnover provided under Annexure-B Notification issued on 11-8-03 respondents will be entitled to benefit of amended Annexure-A Notification with effect from the date on which it was amended vide Annexure-B Notification. In other words, concession/exemption on clearances will be available to respondents only by virtue of Annexure-B Notification with effect from the date on which that notification came into force i.e 11-8-2003. We do not know on what basis, the Tribunal has held that prospectivity has no relevance in this case. The Tribunal, instead of considering the scope of notifications with reference to the statutory provisions, under which those are issued, considered the scope of the statutory provisions with reference to the notifications issued. The Tribunal ought to have taken into account the powers of the Government, even to rescind Annexure-B Notification or to change the pattern of exemption available under Annexure-A as amended by Annexure-B Notification. The very purpose of Clause (5)(a) to Section 5A is to cloth the Government with the power to grant benefit of any notification retrospectively wherever it is required or desirable. It is for the Government to consider whether a notification should be given retrospectivity, and if so, up to what period and unless it is so provided, the Tribunal or even the High Courts have no power to grant retrospectivity for a notification in the interpretation process. We, therefore, allow the appeals by quashing the orders of the Tribunal and restoring the original orders confirmed in first appeals.
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