K.L. Rekhi, Member (T)

1. The Central Government levied ascess the duty of excise at the rate of 1/8% ad valorem on paper and paperboard, all sorts, under Section 9 of the Industries (Development and Regulation) Act, 1951, with effect from 1st November, 1980.

2. On 3-2-1981, by issue of a notification, the Central Government exempted the industrial undertakings "having investment in fixed assets in plant and machinery not exceeding Rs. 20 lakhs" from payment of this cess. By issue of orders subsequently, the Government gave this notification retrospective effect from the date of the levy, i.e., 1-11-1980. Simultaneous with the exemption notification dated 3-2-1981, a clarification was issued by the Collector, by means of a trade notice that-

"The cess is payable only on the out-put of paper and paperboard pertaining to the organised sector of the paper industry i.e. units registered with D.G.T.D. or licensed under the Industries (Development and Regulation) Act."

The point of dispute in the present appeal before us is whether the respondents were eligible to the exemption from cess contained in the notification dated 3-2-1981.

3. Our attention was drawn to the Order-in-Original of