ORDER
R. Jayaraman, Member (T)
1. For hearing the applicants’ appeal on merits, they are required to deposit a sum of Rs. 2,52,217.04 towards duty.
2. Shri Karnik, the learned advocate, on behalf of the applicants contended that prima facie, the order of the authorities below is bad in law since they have ignored the Retrospective Legislation, namely the Central Duties of Excise (Retrospective Exemp tion) Act, 1986. Elaborating on this point further, he stated that the applicants are manufacturers of Tungsten Carbide Tools Tips. For manufacturing these tool tips they are required to produce at the intermediary stage Tungsten Carbide Power. These products were exempted before 28-2-86 in terms of the Notification No. 118/75. Conse quent on new Tariff and simultaneous extension of MODVAT credit, this notification was rescinded on 1-3-86. Further the goods captively consumed covered by MODVAT scheme were again exempted by Notification No. 217 of 2-4-86. The demand made is in respect of the period from 1-3-86 to 2-4-86 which completely over-looks the provisions of the Retrospective enactment cited above. He particularly took us through the provisions of the relevant Section of the said enactment wherein it has been laid down that, every notification issued by the Government of India on or after the 3rd day of March, 1986, but before the 8th day of August, 1986, shall be deemed to have and to have always had effect on and from the 1st day of March, 1986. Since Notification No. 217, dated 2-4-86 is well covered by this period it shall be deemed to have this effect even during the period from 1-3-86 to 2-4-86. This point has not been appreciated by the authorities below and the impugned demand is prima facie bad in law.
3. Heard Shri Arya. He contended that the Retrospective Legislation is in tended to maintain the level of duties as prevalent before 1.3.86. In this case, Notifica tion No. 118/75 was applicable to Tariff Item No. 68, which was no longer in existence after 1-3-86. Moreover, Notification No. 118/75 totally exempted of goods for captive consumption and it is not a case where the rate of duty has been changed.
4. After hearing both sides, we are unable to accept the arguments of Shri Arya that rescinding of Notification No. 118/75 is not brought about any change in the rate of duties. It is a fact that Notification No. 118/75 was eliminated and a comprehensive Tariff came into existence on 1-3-86 consequent on which Notification No. 118/75 was res cinded. However, the principle enshrined in that Notification has been reintroduced by Notification No. 217, dated 2-4-86 and this Notification also came to be issued during the period covered by Retrospective Legislation. Hence prima facie we are satisfied that the status quo ante as was prevalent prior to 1-3-86 in respect of captively consumed goods within the factory was not to be disturbed, notwithstanding rescinding of Notifica tion 118/75, because of the Retrospective Legislation giving retrospective effect to the Notification No. 217, dated 2-4-86. Since we are prima facie satisfied that the authorities below have not applied the Retrospective enactment properly we grant an uncondition al stay as to the prior deposit of duty demanded.
5. It was also pleaded by Shri Karnik that despite the stay application being heard, the goods have been ordered detention. In view of the unconditional stay granted, they may approach the appropriate authority for getting release of the goods.