JAY MAHAKALI ROLLING MILLS versus UNION OF INDIA AND ORS.

Citation: [2007] 8 S.C.R. 855 · Decided: 06-08-2007 · Supreme Court of India · Bench: ARIJIT PASAYAT · Disposal: Dismissed

Cited by 2 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

JAY MAHAKALI ROLLING MILLS 
A 
v. 
UNION OF INDIA AND ORS. 
AUGUST 6, 2007 
[DR.ARIJITPASAYAT ANDLOKESHWARSINGHPANTA,JJ.] 
B 
Central Excise-Circular issued with regard to amendment relatable 
to Central Excise Notification whereby bars and rods made from ship breaking 
scrap were exempted from excise duty-Word "now" used as prefix before the C 
word "exempt"-Held: Effect of the word "now" is that it is to operate 
henceforth-Amendment was intended to have prospective effect. 
Words and Phrases-Words 'now' and 'retrospective '-Meaning of 
Interpretation of Statutes-Retroactive statute-Held: Means a statute, 
which creates a new obligation on transactions or considerations or destroys D 
or impairs vested rights. 
Circular dated 31-3-1987 was issued with regard to amendment relatable 
to Central Excise Notification No.101/87-CE, dated 27-03-1987 whereby bars 
and rods made from ship breaking scrap were exempted from excise duty. 
E 
The question which arose for consideration in the present appeals is 
whether the amendment was intended to have prospective effect or retrospective 
effect 
Dismissing the appeals, the Court 
HELD: 1.1. A bare reading of the circular clearly shows that it was 
intended to have prospective effect. [Para 71 )858-E) 
F 
1.2. In the Circular dated 31.3.1987 it has been stated that the "products 
like bars and rods made from such ship breaking scrap would "now" exempt G 
from excise duty". The effect of the word "now" is that it is to operate 
hencef~ rth. If the intention was to give retrospective effect, it would have t een 
stated to be so specifically. tpara 8) f 858-F) 
2. "Retrospective" means looking backward, contemplating what is past, 
855 
H 
856 
SUPREME COURT REPORTS 
(2007) 8 S.C.R. 
A having reference to a statute or things existing before the Statute in question. 
Retrosp«tive law means a law which looks backward or contemplates the past; 
,--
one, which is made to affect acts or facts occurring, or rights occurring, 
before it comes into force. Retroactive statute means a statute, which creates 
a new obligation on transactions or considerations or destroys or impairs 
B vested rights. (Para 9) (858-G-H; 859-A) 
c 
D 
E 
3. By the amendment relatable to Notification on 27.3.1987, items which 
were earlier not included were specified as inputs and have been included. 
That being so, the contention that the amendment merely clarified the 
notification as it stood prior to the amendment, is untenable. 
(Para 10) (859-A-B) 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 5109 of2002. 
From the Judgment and Order dated 15.1.2002 of the High Court of 
Gujarat, at Ahmedabad in S.C.A. No. 2816 of 200 l. 
WITH 
Civil Appeal No. 855 of2006. 
A.n Maru, Bhargava V. Desai, Rahul Gupta, Reema Shanna for the 
Appellant. 
B. Krishna Prasad for the Respondent. 
The Judgment of the Court was delivered by 
DR. ARIJIT PASA VAT, J. 1. Challenge in these appeals is to the order 
F passed by the Division Bench of the Gujarat High Court dismissing the writ 
petition filed against the orders of the Cus.toms, Excise & (Gold) Control 
.-< 
AppeUateTribunal, West Regional Bench, at Mumbai (in short 'CEGAT). 
2. Background facts in Civil Appeal No.5109 of 2002 in a nutshell are 
as follows: 
G 
A s~ow-cause notice was issued to the appellant alleging that the 
appellant was not entitled to the exemption un.der Notification No.208/83-CE 
dated l.8.1983 on the final product falling under Tariff Item No.25(9)(ii). 
Allegation was that the appellant M/s Jay Mahakali Rolling Mills had 
contravened the provisions of Rule 174 of the Central Excise Rules, 1944 (in 
H short the 'Rules') read with Section 6 of the Central Excise and Salt Act, 1944 
--
-
JAY MAHAKALI ROLLING MILLSv. U.0.1. [PASA VAT, J.] 
857 
(in short the 'Act) and Rules 173-B; 53 read with 173-G( 4); 9( 1 ), 49, 52-A read A 
with 173-G(l), 173-G(2)and 174-F; 54 read with 173-F(3) of the Rules and 
thereby committed the offence of the nature described in clauses (a), (b), (c) 
& (d) of sub rule (1) of Rule 173(Q) of the Rules by reasons of wilful 
misstatement, suppression of facts with intent to evade payment of central 
excise duty. The appellant was, therefore, asked to show-cause as to why 
Central Excise Duty amounting to Rs.12,67,006.19, on 3473.705.2.2 MT excisable B 
goods i.e. rolling products manufactured and cleared by it without payment 
of duty for the period 23.8.1984 to 31.8.1987 should not be recovered from it 
under Rule 9(2) of t

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