Customs, Excise and Gold Tribunal - Delhi
Mekastar Telematics Ltd. vs Commissioner Of Customs on 10 October, 2000
Equivalent citations: 2001(130)ELT285(TRI-DEL)
ORDER V.K. Agrawal, Member (T)
1. The issue involved in this appeal, filed by M/s. Mekastar Telematics Ltd. is whether the Computer Software and Protocol Analyses imported by them, are eligible for exemption under Notification No. 51/96-Cus., dated 23-7-1996 and whether the amendment made in Notification by Notification No. 20/2000-Cus., dated 1-3-2000 is retrospective in effect.
2. Shri K. Kumar, ld. Advocate, submitted that the Appellants imported the impugned goods under Bill of Entry No. 793566 dated 20-7-1999 from U.S.A. for and on behalf of Telecommunication Engineering Centre, Department of Telecommunication (TEC, in short); that they claimed exemption from payment of Customs duty under Notification No. 51/96-Cus. which exempts scientific and technical instruments, apparatus, equipments if the importer, Public funded research institution, is registered with the Department of Scientific and Industrial Research; that the Customs cleared the consignment extending the exemption benefit; that subsequently a show cause-notice dated 20-12-1999 was issued for denying the benefit of Notification and for demanding customs duty and for imposing penalty; that the Commissioner of Customs, under the impugned order confirmed the demand of Customs duty amounting to Rs. 11,23,113/- imposed penalty of Rs. 10 lakhs and found the imported goods liable for confiscation under Section 111(m) and (o) of the Customs Act but did not impose any redemption fine as the goods were not liable for confiscation, holding that since the Appellants had imported the goods, they were not eligible to avail the benefit of Notification No. 51/96-Cus. and that TEC had no authority to issue Customs Duty Certificate.
3. The ld. Advocate, further, submitted that the impugned goods were meant only for TEC which was registered with Department of Scientific & Industrial Research for the purpose of availing exemption of customs duty in terms of Notification No. 51/96; that in Purchase Order it was clearly mentioned that Customs duty was not included in the total price; that the purpose of the Notification should be deemed to have been served as the goods were supplied to TEC; that realizing this aspect the Notification was amended by Notification No. 20/2000-Cus. wherein the condition now pro-vided is that the "goods are imported by or for delivery to..."; that this amendment is clarificatory in nature and as such will have retrospective effect. He relied upon the decision in Central Machine Tool Institute v. Customs Bangalore, Final Order No. 2570/99 and 4-10-1999 [2000 (124) E.L.T. 231 (T)] in which the amendment notification was given effect from the date of the original notification. The ld. Advocate also relied upon the decision in Gujarat Coop. Oil Seeds Growers Ltd. v. C.C.E., Baroda, 1999 (114) E.L.T. 376 (S.C.) wherein a subsequent Notification was held to be a clarifcatory one. Reliance was also placed upon the following decisions :
(i) Collector of Customs v. Shaw Wallace -1990 (50) E.L.T. 143 (T). (ii) CCE, Shillong v. Wood Crafts Products Ltd. - 1995 (77) E.L.T. 23 (S.C.) (iii) Super Casette Industries Ltd. v. CC -1992 (58) E.L.T. 105 (T) (iv) Indian Aluminium Co. Ltd. v. C.C.E., Cochin -1995 (79) E.L.T. 111 (T)
4. Countering the arguments, Shri K.K. Goel, ld. SDR, submitted that column (2) of the Table, annexed to the Notification No. 51/96-Cus. specified the name of the importer and even after amendment, Col. No. 2 has not undergone any change; that only Col. (4) which contains condition has been amended; that accordingly even after amendment, there is no change in the situation that only Public funded research institution can import the goods and admittedly the Appellants are not public funded research institution; that conditions specified in Col. (4) are immaterial as far as the importer is concerned. He, further, submitted that as held by the Supreme Court in the case of Mediwell Hospital and Health Care Pvt. Ltd. v. U.O.I., 1997 (89) E.L.T. 425 (S.C.), a Notification issued under Section 25(1) of the Customs Act is complete law by itself and it cannot be diluted in any manner and failure to observe the obligation cast in Notification completely binds a defaulter to the consequences thereto; that one cannot go beyond the text of the Notification and as Notification 51/96-Cus. confers the benefit on public funded research institution, the Appellants cannot import the goods and claim the benefit. He also mentioned that non payment of Customs duty by TEC is an internal matter between the Appellants and TEC which cannot have any bearing on the payment of Customs Duty. Regarding the retrospective effect of amending Notification, the ld. S.D.R. submitted that unless specifically mentioned in the Notification, every notification comes into effect from the date of its issue. Reliance was placed on the decision in the case of Cannanore Spinning & Weaving Mills v. C.C.E., Cochin -1978 E.L.T. J 375 and I.T.C. Bhadrachalam v. CCE - 1994 (71) E.L.T. 334 (S.C.).
5. In reply, the ld. Advocate mentioned that the Words "the goods are imported by or for delivery to" in Col. (4) by Amending Notification 20/2000-Cus. are to be read with Col. (2) and as such goods can be imported by the Appellants "for" the public funded research institution; that the intent and purpose of the Notification is to be taken into consideration while interpreting the same; that the Larger Bench of the Tribunal in Pre Cast Engineering Pvt. Ltd. v. CCE, 2000 (38) RLT 501 held that exemption notification should be interpreted in a manner to give full effect to the intention of the Government; that the intent and purpose of the Notification was to allow duty free import for public funded research institution which has been fulfilled as the goods were imported for TEC only as is evident from the Purchase Order. Finally he submitted that Notification does not contain any post import conditions and as such the Appraiser must have seen the Certificate from the Head of the Institution that goods were required for research purpose only before allowing the clearance; that accordingly provisions of Section 111(o) and 111 (m) of the Customs Act are not attracted and they cannot be blamed of misrepresentation and accordingly neither penalty is imposable under Section 112 nor interest is chargeable under Section 28AB of the Customs Act. The ld. SDR contended that words "by" and "for" introduced by Amending Notification provided that public funded research institution can import specified goods for themselves as well as for others.
6. We have considered the submissions of both the sides. Serial No. 1 of the Table annexed to Notification No. 51/96-Cus. reads as under:
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Sl. Name of the Importer Description of goods Conditions No.
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1. Public funded research (a) Scientific and Techni- If the importer Institution or a Un cal instruments, appara- (i) is registered with the versify or an Indian tus, equipment (includ- Govt of India in the De-
Institute of Technology ing Computers); partment of
Scientific and
or Indian Institute of (b)accessories,spare Industrial Research,
Science, Banaglore or a parts and consumumables (ii)produces,at the time
Regional Engineering tereof of importation a cer tifi
College, other than a (c) Computer software cate from the head of the
hospital compact Disc-Read only Institution, in each case,
Memory (CD ROM) re- certifying that the said
corded magnetic tapes goods are required for
microfilms microfliches. research purposes only.
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After amendment by Notification No. 20/2000-Cus., dated 1-3-2000, condition in Col. No. (4) of the Table annexed to Notification No. 51/96-Cus. reads as under:
(i) the goods are imported by or for delivery to (a) a public funded research institution under administrative control of the Department of space or the Department of Atomic energy or the Department of Defence Research Development of the Government of India, or
(b) an institution registered with Government of India, Department of Scientific And Industrial Research, and the institution produces a certificate to this effect from an officer not below the rank of a Deputy Secretary to the concerned Department
(ii) ...
7. The facts which are not in disputes are that the goods were imported by the Appellants and they had supplied the goods to Telecommunication Research Centre which is a public funded research institution. When the goods were imported notification provided that goods should be imported by the public funded research institution which the appellants are not. The main plea of the ld. Advocate for the Appellants is that the amendment made in Col. (4) of the Table by Notification No. 20/2000-Cus. is clarificatory in nature and what was implicit had been made explicit and as such will be applicable retrospectively. We do not agree with this contention of the ld. Advocate as there is nothing in the Notification as it was issued to suggest that the goods could be imported by any person "for" public funded research institution. If the scope of the Notification is extended subsequently it does not mean that it would automatically become applicable retrospectively unless and until the Notification specifically provides so. This is what is held by the Supreme Court in Cannanore Spg. & Wvg. Mills case, supra, wherein the Supreme Court held that "The rule making authority had not been vested with the power under Central Excises and Salt Act to make rules with retrospective effect. Therefore the retrospective effect purported to be given under Exh. P-12, (Notification) was beyond the powers of the rule making authority." Further the Larger Bench of the Tribunal in the case of CCE, Vadodara v. Rotomould (India) Pvt. Ltd., 2000 (38) RLT 698 held that Notification No. 119/89 dated 27-4-1989 which amended Notification No. 175/86-C.E. enhancing the value of clearances of goods by a small scale unit during the preceding financial year from Rs. 150 lakhs to Rs. 200 lakhs was effective only from the date of notification only i.e. 27-4-1989 and clearances effected prior to date of this notification cannot be governed by amending notification. Further the Supreme Court in the case of Bombay Oil Industries Pvt. Ltd. v. U.O.I., 1995 (77) E.L.T. 32 (S.C.) held that "even if the Central Government corrected its error about condition No. 2 from 2-9-1978 by issuing a fresh Notification, the earlier colour specification requirement remained operative for imports made by the concerned importers prior to 2-9-1978 when the earlier Notification dated 2-8-1976 was holding the field. The latter Notification cannot be said to be merely clarificatory Notification nor can it have any retrospective effect. It is a fresh Notification laying down fresh condition deleting the earlier condition."
8. The decisions relied upon by the ld. Advocate are not applicable as the facts are different. For instance in Central Machine Tools Institute, the Department itself considered the applicability of Notification No. 70/81 to Computer Software and referred the matter to DOE. The Tribunal, in view of the peculiar facts and circumstances of the said case, held that the amendment Notification shall have effect from the date of the original notification. Similarly in the case of Wood Craft Products, supra, the Supreme Court after referring to H.S.N. Explanatory Notes, Oxford Encyclopedic English Dictionary and New Encyclopadia Britannica, Vol. 19, the Supreme Court came to the conclusion that words 'similar laminated wood' in Heading 44.08 of Central Excise Tariff must be construed to include within it block boards of all kinds. In view of this finding, the Apex Court observed that the amendment in Note 5 to Chapter 44 with effect from 19-3-90 and thereafter w.e.f. 1-3-1992 merely clarified and made explicit that which was implicit in the Heading throughout. Similarly in Gujarat Co-op. Oil Seeds case, supra, Supreme Court had no hesitation to come to the conclusion that Entry 2 of Notification No. 12/89 related to all goods other than Entry No. 1 and in view of this the subsequent Notification was held to be merely a clarificatory one. No such claim can be made from the language of the Notification No. 51/96 before its amendment by Notification No. 20/2000-Cus. Accordingly we hold that the subsequent amending notification is not a clarificatory one and will not have retrospective operation and thus the benefit of exemption under Notification No. 51/96-Cus. is not applicable to the impugned goods imported by the Appellants. We, therefore, uphold the demand of Customs duty against the Appellants.
9. We however, agree with the ld. Advocate that neither the penalty is imposable on the Appellants nor interest is chargeable from them under Section 28AB of the Customs Act. Merely because they claim benefit of exemption Notification No. 51/96 in the Bill of Entry, it can not be said that there was any wilful mis-declaration or suppression of the facts. The Appellants have claimed that they had presented all the documents relating to the import before the Customs Authorities at the time of import. .Perusal or Bill of Entry reveals that they had mentioned themselves as the importer. No case, thus has been made by the Revenue for imposition of penalty and as there is no wilful mis-declaration, etc., provisions of Section 28AB are also not invokable. We therefore, set aside the penalty imposed and interest demanded.
The appeal is disposed of in the above terms.