Custom, Excise & Service Tax Tribunal
Air India Ltd vs Commissioner, Customs (Appeals)-New ... on 29 January, 2025
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI
PRINCIPAL BENCH - COURT NO. 1
CUSTOMS APPEAL NO. 51929 OF 2022
[Arising out of Order-in-Appeal No. CC(A)/Customs/D-I/Import/NCH/23-161/2022-23
dated 28.04.2022 passed by the Commissioner of Customs (Appeals), New Delhi]
M/s. Air India Ltd. ...Appellant
th th th
Intellion Edge, Tower A, 7 , 9 & 10 Floor,
South Peripheral Road, Section - 72,
Gurgaon - 122101
VERSUS
Commissioner of Customs, New Delhi ...Respondent
New Customs House, Near IGI Airport,
New Delhi - 110037
WITH
CUSTOMS APPEALS OF THE YEAR 2022
51795 51815 51835 51855 51875 51895 51915
51796 51816 51836 51856 51876 51896 51916
51797 51817 51837 51857 51877 51897 51917
51798 51818 51838 51858 51878 51898 51918
51799 51819 51839 51859 51879 51899 51919
51800 51820 51840 51860 51880 51900 51920
51801 51821 51841 51861 51881 51901 51921
51802 51822 51842 51862 51882 51902 51922
51803 51823 51843 51863 51883 51903 51923
51804 51824 51844 51864 51884 51904 51924
51805 51825 51845 51865 51885 51905 51925
51806 51826 51846 51866 51886 51906 51926
51807 51827 51847 51867 51887 51907 51927
51808 51828 51848 51868 51888 51908 51928
51809 51829 51849 51869 51889 51909 52221
51810 51830 51850 51870 51890 51910
51811 51831 51851 51871 51891 51911
51812 51832 51852 51872 51892 51912
51813 51833 51853 51873 51893 51913
51814 51834 51854 51874 51894 51914
APPEARANCE:
Ms. Nupur Maheshwari, Advocate for the Appellant
Shri S.K. Rahman, Authorized Representative for the Respondent
CORAM:
HON'BLE MR. JUSTICE DILIP GUPTA, PRESIDENT
HON'BLE MRS. HEMAMBIKA R. PRIYA, MEMBER (TECHNICAL)
DATE OF HEARING/DECISION: 29.01.2025
2
C/51929/2022 & 135 others
FINAL ORDER NO's. 50122-50257/2025
JUSTICE DILIP GUPTA:
The issue that arises for consideration in all these 136 appeals is
whether Notification No. 36/2021-Customs dated 19.07.2021 1 issued
under section 25(1) of the Customs Act, 1962 2 amending Notification No.
45/2017-Customs dated 30.06.2017 3 would have retrospective effect
from the date the Exemption Notification was issued on 30.06.2017.
2. The relevant portions of the Exemption Notification dated
30.06.2017 are as follows:
"In exercise of the powers conferred by sub-
section (1) of section 25 of the Customs Act, 1962
(52 of 1962) the Central Government, on being
satisfied that it is necessary in the public interest so to
do, hereby exempts the goods falling within any
Chapter of the First Schedule to the Customs Tariff Act,
1975 (51 of 1975) and specified in column (2) of the
Table below when re-imported into India, from so much
of the duty of customs leviable thereon which is
specified in the said First Schedule, and the
integrated tax, compensation cess leviable
thereon respectively under sub-section (7) and
(9) of section 3 of the said Customs Tariff Act, as
is in excess of the amount indicated in the
corresponding entry in column (3) of the said
Table.
Table
Sl. Description of goods Conditions
No.
(1) (2) (3)
1. ***** *****
2. Goods, other than Duty of customs
those falling under Sl which would be
No. 1 exported for leviable if the value
repairs abroad of re-imported goods
after repairs were
1. the Amendment Notification
2. the Customs Act
3. the Exemption Notification
3
C/51929/2022 & 135 others
made up of the fair
cost of repairs
carried out including
cost of materials
used in repairs
(whether such costs
are actually incurred
for not), insurance
and freight charges,
both ways.
3-5 ***** *****
Explanation. - *****
(a) *****
(b) *****
(c) *****"
(emphasis supplied)
3. A Division Bench of this Tribunal in InterGlobe Aviation Ltd. vs.
Commissioner of Customs, New Delhi 4 after referring to sections
2(15), 12(1) of the Customs Act and sub-sections (1), (7) and (9) of
section 3 of the Customs Tariff Act, 1975 5 and to the judgments of the
Supreme Court in Prestige Engineering (India) Limited vs. Collector
of C., Excise, Meerut 6 Collector of Customs, Madras vs. Indian
Organic Chemicals Limited 7 and M/s. Unicorn Industries vs. Union
of India and others 8 and the judgment of the Bombay High Court in
Ceat Tyres of India Limited vs. Union of India 9 observed:
(i) Though the expression duty of customs has not been
defined under the Exemption Notification but it can only
have that meaning which has been assigned to the
meaning of 'duty' under section 2(15) of the Customs Act.
It would, therefore, mean the 'duty of customs' leviable
under the Customs Act and any other duty not levied
4. 2020 (43) G.S.T.L. 410 (Tri. - Del.)
5. The Tariff Act
6. 1994 (73) E.L.T. 497 (S.C.)
7. 2000 (118) E.L.T. 3 (S.C.)
8. 2019 (370) E.L.T. 3 (S.C.)
9. 1992 (57) E.L.T. 221 (Bom.)
4
C/51929/2022 & 135 others
under the Customs Act, would not be duty of customs for
the purposes of any Notification issued under the Customs
Act;
(ii) Integrated tax has also not been defined under the
Exemption Notification. It has been defined under section
2(12) of the Integrated Goods and Service Tax 10 to mean
the tax levied under the Integrated Tax Act. Integrated
Tax is levied under section 5 of the Integrated Tax Act
and not under section 12 of the Customs Act, and
therefore, cannot be called as duty of customs; and
(iii) Section 3 (7) of the Tariff Act only provides the manner of
collection of the integrated tax by the customs authorities
in case of import of goods.
4. The Division Bench, thereafter, noted:
"34. A perusal of the main body of the Exemption
Notification would indicate that it refers not only
to duty of customs leviable thereon which is
specified in the First Schedule to the Tariff Act, but
also to integrated tax and compensation cess
which are leviable thereon respectively under sub-
sections (7) and (9) of section 3 of the Tariff Act.
However, column (3) of the Table accompanying
the main Notification for serial no. 2 refers to only
duty of customs (without mentioning 'leviable thereon
which is specified in the First Schedule'), on the fair
cost of repairs carried out with insurance and
freight charges."
(emphasis supplied)
5. And then the Division Bench held:
"36. ***** It, therefore, inevitably follows that
the expression duty of customs occurring in the
column (3) of the Table at serial no. (2) of the
Exemption Notification would only mean the duty
5
C/51929/2022 & 135 others
of customs leviable under the Customs Act as
have been specified in the First and Second
Schedules to the Tariff Act and not to integrated
tax, which is levied under section 5 of the
Integrated Tax Act.
*****
39. What also needs to be kept in mind is that mention of duty of customs, integrated tax and compensation cess in the main body of the Exemption Notification implies that the Government was conscious of the distinction between the three. What is also important to notice is that after the phrase "duty of customs levied thereon which is specified in the said First Schedule", there is a comma before "and the integrated tax, compensation cess leviable thereon". This also clearly shows that duty of customs, integrated tax and compensation cess are three different entities. Above all, all the three, namely, duty of customs, integrated tax and compensation cess have been used in the main body of the same Exemption Notification.
*****
48. The inevitable conclusion that follows from the aforesaid discussion is that the absence of mention of integrated tax and compensation cess in column (3) under serial no. 2 of the Exemption Notification would mean that only the basic customs duty on the fair cost of repair charges, freight and insurance charges are payable and integrated tax and compensation cess are wholly exempted."
(emphasis supplied)
6. The appeals were allowed by the Tribunal by a decision dated 02.11.2020 and the operative part of the order is reproduced below:
"50. Thus, for all the reasons stated above, it is not possible to sustain the impugned orders upholding the assessments made on the 346 Bills of Entry. The 346 orders passed by the Commissioner (Appeals) are, accordingly, set aside and it is held that the 6 C/51929/2022 & 135 others Appellant is entitled to exemption from payment of integrated tax under the Exemption Notification on re-import of repaired parts/ aircrafts into India. All the 346 Appeals are, therefore, allowed."
(emphasis supplied)
7. The aforesaid decision of the Tribunal led to the issue of the Amendment Notification dated 19.07.2021 under section 25(1) of the Customs Act.
8. It would, therefore, be appropriate to reproduce this Amendment Notification dated 19.07.2021 as the issue involved in all the appeals is whether this Amendment Notification would have retrospective effect from the date of issue of the Exemption Notification i.e. 30.06.2017. It is reproduced below:
"NOTIFICATION NO. 36/2021-Customs New Delhi, the 19th July, 2021 G.S.R. 493(E). -In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby makes the following amendments in the notification of the Government of India, in the Ministry of Finance (Department of Revenue), No. 45/2017-Customs, dated the 30th June, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section
(i), vide number G.S.R. 780(E), dated the 30th June, 2017, namely: -
In the said notification, -
(i) in the Table, against serial number 2 and 3, in column (3), for the words "Duty of customs", the words "Said duty, tax or cess" shall be substituted;
(ii) in the Explanation, after clause (c), the following clause shall be inserted, namely: -7
C/51929/2022 & 135 others "(d) on recommendation of the GST Council for removal of doubt, it is clarified that the goods mentioned at serial numbers 2 and 3 of the Table, are leviable to integrated tax and cess as leviable under the said Customs Tariff Act, besides the customs duty as specified in the said First Schedule, calculated on the value as specified in column (3), and the exemption, under said serial numbers, is only from the amount of said tax, cess and duty over and above the amount so calculated."
(emphasis supplied)
9. On the same date, the Central Board of Indirect Taxes and Customs 11 also issued a clarification regarding applicability of integrated tax on repair cost, insurance and freight on goods re-imported after their export for repairs. This clarification was issued basis the recommendation made by the GST Council in its 43rd Meeting held on 28.05.2021. It states that the matter was placed before the GST Council in view of the decision rendered by the Tribunal on 02.11.2020 in InterGlobe Aviation and that the GST Council recommended that a suitable clarification, including any clarifictory amendment, if required, may be issued for removal of any doubt to clarify the decision of the GST Council that re-import of goods sent abroad for repairs attracts integrated tax and cess. The Circular provides that the clarifictory amendment was being issued to give effect to the recommendations made by the GST Council. It would be appropriate to reproduce the said Circular dated 19.07.2021 and it is as follows:
"Circular No. 16/2021-Customs ***** Government of India Ministry of Finance Department of Revenue (Central Board of Indirect Taxes & Customs) ***** New Delhi, dated 19th July, 2021 *****
11. CBIC 8 C/51929/2022 & 135 others Subject: Clarification regarding applicability of IGST on repair cost, insurance and freight, on goods re-imported after being exported for repairs, on the recommendations of the GST Council made in its 43rd meeting - reg.
References have been received seeking clarification on the issues of the applicability of IGST on repair cost, insurance and freight, on goods re-imported after being exported abroad for repairs.
2. Notification Nos. 45/2017-Customs and 46/2017- Customs, both dated 30th June, 2017, issued at the time of implementation of GST, prescribe certain concession from duty/taxes on reimport of goods exported for repair outside India. These notifications, specifically serial No. 2 ibid, clearly specify that goods exported (other than those exported under claim of benefits listed), when re-imported into India, are exempt from so much of the duty of customs leviable thereon which is specified in the said First Schedule of the Customs Act, 1962, and the integrated tax, compensation cess leviable there on respectively under sub-section (7) and (9) of section 3 of the said Customs Tariff Act, 1975 as is in excess of the duty of customs which would be leviable if the value of re-imported goods after repairs were made up of the fair cost of repairs carried out including cost of materials used in repairs (whether such costs are actually incurred for not), insurance and freight charges, both ways.
3. Therefore, the said notification prescribes that duties or taxes (including BCD, IGST, etc) at the applicable rates will be payable on such imports, calculated on the value of repairs, insurance and freight, instead of the value of the goods itself. Similar concession existed in pre-GST period too, vide notification No. 94/96-
Customs, whereby, the customs duty (BCD, additional duty of customs under section 3 of Customs Tariff Act, 1975, etc.) were payable on the value of repairs instead of the entire value of goods in such imports.
4. GST rate and exemptions are prescribed on the recommendation of the GST Council. The Council, at the time of roll out of GST decided to continue the 9 C/51929/2022 & 135 others concession as were available under the said notification No. 94/96-Cus, with only consequential amendment, i.e, replacing additional duties of customs with IGST and Compensation cess, as discussed in the 14th Meeting of the GST Council. Accordingly, under GST, IGST and Compensation cess were made applicable on the value of repairs, insurance and freight on re-import of goods sent abroad for repair.
5. Again, during the 37th GST Council Meeting, while examining the request to make available the credit of ITC paid on aircraft engines and parts exported for repairs and later reimported, the leviability of IGST on such imports, on the cost of repairs, insurance and freight charges, was affirmed. In fact, this was never disputed in first place and the request was to allow credit of the IGST so paid. Similarly, while examining the question of GST rate on maintenance, repair and overhauling (MRO) services in respect of aircraft, aircraft engines and other components and parts, the leviability of IGST on such re-imports was again affirmed by the GST Council in its 39th meeting, making it explicitly clear that such goods reimported after repair from outside India attract IGST on the repair, freight and insurance value. In the said discussion, the IGST levied on such goods re-imported after being exported abroad for repairs was a significant factor considered by the GST Council while deciding the rate on MRO services. The above deliberations of the GST Council leave no doubt that the Council had consciously recommended for levy of IGST and cess, albeit at the repair, insurance and freight cost instead of the entire value of goods imports, on the basis of which the said notifications No. 45/2017-Cus and 46/2017- Cus were issued.
6. Recently, in the matter of M/s Interglobe Aviation Limited versus Commissioner of Customs, in its Final Order Nos. 51226-51571/2020 dated the 2nd November, 2020 {2020 (43) G.S.T.L. 410 (Tri. - Del.)}, the Hon'ble CESTAT Principal Bench, New Delhi on analysis of notification No. 45/2017-Customs, has interpreted that intention 10 C/51929/2022 & 135 others of legislation was only to impose basic customs duty on the fair cost of repair charges, freight and insurance charges on such imports of goods after repair. The Hon'ble CESTAT has thus concluded that integrated tax and compensation cess on such goods would be wholly exempt. An appeal has been preferred by the Department before the Hon'ble Supreme Court against the said Order.
7. In the above background, the matter was placed before the GST Council in its 43rd Meeting held on the 28th May, 2021. The GST Council deliberated on the issue and recommended that a suitable clarification, including any clarificatory amendment, if required, may be issued for removal of any doubt, to clarify the decision of the GST Council that re-import of goods sent abroad for repair attracts IGST and cess (as applicable) on a value equal to the repair value, insurance and freight.
8. Accordingly, as recommended by the GST Council, it is clarified that notification Nos. 45/2017-Customs and 46/2017-Customs, both dated the 30th of June, 2017 were issued to implement the decision of the GST Council taken earlier, that re-import of goods sent abroad for repair attracts IGST on a value equal to the repair value, insurance and freight. Further, in the light of the recommendations of the GST Council in its 43rd Meeting, a clarificatory amendment has been made in the said notifications, vide notification Nos. 36/2021-Customs and 37/2021- Customs, both dated 19th July, 2021, without prejudice to the leviability of IGST, as above, on such imports as it stood before the amendment.
9. The contents of this circular may please be brought to the notice of trade and industry through issue of Trade/ Public notices. The field formations may also be suitably sensitized in this regard. Difficulty, if any, in the implementation of this Circular may be brought to the notice of this office."
(emphasis supplied) 11 C/51929/2022 & 135 others
10. The Commissioner (Appeals), in the orders impugned in the appeals, considered the Amendment Notification dated 19.07.2021 as also the Circular dated 19.07.2021 issued by the CBIC and observed that a conjoint reading of the two would make it clear that Explanatory Note 'd' is clarificatory in nature and hence would have retrospective effect.
11. Ms. Nupur Maheshwari, learned counsel for the appellant made the following submissions:
(i) The issue as to whether the phrase 'duty of customs' as mentioned under serial no. 2 of the Exemption Notification includes integrated tax has been settled by the Tribunal in the decision rendered on 02.11.2020 in InterGlobe Aviation and subsequent decisions in Interglobe Aviation Ltd. vs. Commissioner of Customs; Spice Jet Limited vs. Commissioner of Customs (General), New Delhi 12; Jet Airways India Ltd. vs. Commissioner of Customs (Import), Mumbai 13; M/s.
Jet Airways (India) Ltd. vs. Commissioner of Customs (Air Cargo) 14; and Jet Airways (India) Ltd. vs. Commissioner of Customs 15;
(ii) The amendments made in Exemption Notification dated 30.06.2017 by the Amendment Notification dated 19.07.2021 are substantive amendments, which cannot be said to have retrospective operation;
(iii) Retrospective amendments can be carried out only under section 25(2A) of the Customs Act;
12. 2021 (1) TMI 663 - CESTAT New Delhi
13. 2021 (2) TMI 1113 - CESTAT Mumbai
14. 2021 (9) TMI 1134 - CESTAT Chennai
15. 2021 (1) TMI 577 - CESTAT New Delhi 12 C/51929/2022 & 135 others
(iv) If a statute has conferred a power to do an act and has also laid down the method in which that power has to be exercised, it necessarily prohibits the doing of the said act in any other manner than that which has been prescribed. As the only manner in which the retrospective explanatory amendment can be carried out under section 25(2A) of the Customs Act has not been undertaken in the Amendment Notification, the amendment cannot be given any retrospective effect. In this connection reliance has been placed on the judgment of the Delhi High Court Commr. Of C. Ex. & S.T., LTU, Delhi vs. Nangalmal Sugar Complex 16;
(v) The amendments made by the Amendment Notification are not 'clarificatory'. They are substantive amendments and hence, cannot be given retrospective operation. A clarificatory provision is generally made to supply an obvious omission or to clear doubts as to the meaning of previous language. The test, as accepted from time to time by various courts, is to first consider the meaning of the provision to which an Explanation is to be added without the Explanation and compare the same with the meaning as given by the added Explanation, and if the result is same, then alone the Explanation can be considered as clarificatory and given retrospective effect from the inception of the original provision;
(vi) The newly inserted Explanation (d) reveals that phrases such as 'clarified', 'for removal of doubt', have been used. As the implications of the Exemption Notification prior to and post amendment are not the same, mere usage of
16. 2020 (371) E.L.T. 501 (Del.) 13 C/51929/2022 & 135 others expressions like 'for removal of doubts' or 'it is clarified' in the newly inserted Explanation (d), will not, by itself, make such amendments clarificatory. The Amendment Notification has created a new and additional liability of integrated tax on the re-import of goods, which was not payable under the un-amended Notification, as interpreted by the Tribunal in InterGlobe Aviation. Thus, once the amendment creates a new liability it cannot have retrospective effect. In this connection reliance has been placed on the judgment of the Supreme Court in Sedco Forex International Drill. Inc. and others vs. Commissioner of Income Tax and another 17; and
(vii) While interpreting an Exemption Notification, what is relevant is the text and the language employed in the Notification and not the intention of the Government or the authority issuing the Exemption Notification. In this connection reliance has been placed on the Constitution Bench judgment of the Supreme Court in Hemraj Gordhandas vs. H.H. Dave Assistant Collector of Central Excise & Customs 18.
12. Shri S.K. Rahman, learned authorized representative appearing for the department, however, supported the impugned order and made the following submissions:
(i) The Exemption Notification dated 30.06.2017 refers to 'duty of customs' and not 'duty of customs leviable under the First Schedule' and, therefore, 'duty of customs' would include basic customs duty and integrated tax;
17. 2005 (11) TMI 25-SC
18. 1978 (2) E.L.T. J 350 (S.C.) 14 C/51929/2022 & 135 others
(ii) Integrated tax is not a duty of customs levible under the Customs Act, but is levied on import of goods under the Tariff Act;
(iii) In clause (ii) of the Amendment Notification, it has been provided that the words 'duty of customs' shall be substituted by 'Said duty, tax or cess' and, therefore, it would have retrospective effect from the date the Exemption Notification was issued on 30.06.2017. In support of this contention, reliance has been placed on the judgment of the Supreme Court in Government of India vs. Indian Tobacco Association 19; the decision of the Tribunal in Principal Commissioner of CGST vs. M/s. OM Fragrances 20; the judgment of the Karnataka High Court Commr. Of C. Ex. & ST, Bangalore vs. Fosroc Chemicals (India) Pvt. Ltd.; and the judgment of the Madras High Court in Mehler Engineered Products India Pvt. Ltd. vs. Union of India 21;
(iv) There is no dispute that during the period Exemption Notification dated 16.12.1996 was operating upto 30.06.2017, duty of Customs included basic customs duty and countervailing duty. There is also no dispute that in terms of the Amendment Notification dated 19.07.2017 duty of customs, integrated tax or cess would be leviable. Therefore, the beneficial Notification which was available prior to 30.06.2017 and available after 19.07.2021 should not be denied during the period from 01.07.2017 to 18.07.2021; and
19. 2005 (187) E.L.T. 162 (S.C.)
20. Excise Appeal No. 51718 of 2018 decided on 29.09.2022
21. 2018 (364) E.L.T. 27 (Mad.) 15 C/51929/2022 & 135 others
(v) The GST Council in its 43rd Meeting held on 28.05.2021 had made it clear that the benefit of the Exemption Notification for both basic customs duty and integrated tax shall be retrospective. The decision of the GST Council, therefore, should be given due importance.
13. It would be seen that section 25(1) of the Customs Act empowers the Central Government to grant exemption from payment of duty by issuing a Notification in the Official Gazette. It is in exercise of the powers conferred under section 25(1) of the Customs Act that the Exemption Notification dated 30.06.2017 was issued by the Central Government. The said Exemption Notification exempts the goods falling within any Chapter of the First Schedule to the Tariff Act and specified in column (2) of the Table when re-imported into India, from so much at the duty of customs leviable thereon which is specified in the First Schedule, and the integrated tax, compensation cess leviable thereon, respectively under sub-sections (7) and (9) of section 3 of the Tariff Act, as is in excess of the amount indicated in the corresponding entry in column (3) of the said Table.
14. The main body of the Exemption Notification refers not only to duty of customs leviable thereon which is specified in the First Schedule to the Tariff Act, but also to integrated tax and compensation cess, but column (3) of the Table accompanying the main Notification against serial number 2 refers to only 'duty of customs' on the fair cost of repairs carried out with insurance and freight charges.
15. It is for this reason that the Division Bench of the Tribunal in InterGlobe Aviation held that the expression duty of customs occurring in the column (3) of the Table at serial number (2) of the Exemption 16 C/51929/2022 & 135 others Notification would only mean the duty of customs leviable under the Customs Act as have been specified in the First and Second Schedules to the Tariff Act and not to integrated tax, which is levied under section 5 of the Integrated Tax Act.
16. The aforesaid decision of the Tribunal in InterGlobe Aviation resulted in the issuance of the Amendment Notification dated 19.07.2021 by the Central Government. This Amendment Notification specifically mentions that it was being issued under section 25(1) of the Customs Act. As noticed above, two amendments were made; the first amendment is that against serial numbers 2 and 3, in column (3), for the words 'Duty of customs', the words 'Said duty, tax or cess' be substituted; and the second amendment is by way of insertion of clause (d) in the Explanation, which provides that on recommendation of the GST Council for removal of doubt, it is clarified that the goods mentioned at serial numbers 2 and 3 of the Table, are leviable to integrated tax and cess, and the exemption, under said serial numbers, is only from the amount of said tax, cess and duty over and above the amount so calculated.
17. The issue that would arise for consideration, therefore, is whether the Exemption Notification dated 19.07.2021, that was issued under sub- section (1) of section 25 of the Customs Act, can have retrospective effect.
18. The main body of the Amendment Notification mentions that the Central Government 'hereby makes the following amendments' in the Exemption Notification dated 30.06.2017. It does not state that the amendment would apply retrospectively from the date the Exemption Notification was issued on 30.06.2017 nor does Explanation (d) state that it has been inserted with retrospective effect. 17
C/51929/2022 & 135 others
19. Section 25(4) of the Customs Act provides that every notification issued under sub-section (1) shall, unless otherwise provided, come into force on the date of its issue by the Central Government for publication in the Official Gazette. In the absence of any specific stipulation in the Amendment Notification providing otherwise, the said Amendment Notification shall come into force on the date of its issue by the Central Government i.e. 19.07.2021. The Amendment Notification dated 19.07.2021 cannot, therefore, have retrospective effect.
20. The issues that have been raised in these appeals were also raised before the Division Bench of this Tribunal in InterGlobe Aviation Limited vs. Commissioner of Customs, New Delhi 22 and it was held that the Amendment Notification dated 19.07.2021 cannot have a retrospective effect. The relevant paragraphs of the decision are reproduced below:
"34. It needs to be remembered that the Amendment Notification does not state that it is retrospective in nature and only an inference is sought to be drawn by the department that the amendment would have retrospective effect because of use of the words 'it is clarified' and 'for removal of doubt'.
35. A clarificatory provision generally seeks to supply an obvious omission or to clear doubts on the meaning of the language used in the previous provisions. It makes explicit or clears the meaning of a provision contained in the Act, which meaning was already implicit. The Courts have repeatedly held that in such a situation it is necessary to first consider the meaning of the provision to which Explanation is added without such Explanation, and then compare the same with the meaning given by the added Explanation. If the result is same, then alone the Explanation can be considered to be clarificatory in nature and given a retrospective effect from the inception of the original
22. Customs Appeal No. 51937 of 2021 decided on 05.08.2024 18 C/51929/2022 & 135 others provision. The provision sought to added cannot be presumed to be clarificatory merely because the provision attached to Notification bears the nomenclature such as 'it is clarified' or 'for the removal of doubts'. It has to be determined, in each case, whether the provision is clarificatory, basis the test laid down by the Courts.
36. In the present case, the Exemption Notification, before its amendment on 19.07.2019, provided for payment of 'duty of customs' on the repair value of the re-imported goods. The Tribunal, in the decision rendered on 02.11.2020 in InterGlobe Aviation, held in very clear terms that the phrase 'duty of customs' referred to in the condition against serial number 2 would not include integrated tax. By the Amendment Notification dated 19.07.2021, the phrase 'duty of customs' has been substituted with the phrase 'Said duty, tax or cess'. The effect of the amendment would be that basic customs duty, integrated tax and cess would be required to be paid on the repair value of the re-imported goods as a condition of grant of exemption. It is, therefore, clear that the requirement to pay customs duty and integrated tax on the repair value of re-imported goods pre-amendment and post amendment is not the same. Mere usage of the words 'for removal of doubts' or 'it is clarified' in the newly inserted Explanation (d) will not, by itself, make the amendment clarificatory in nature. The amendment made on 19.07.2012 is substantive in nature as it seeks to additionally impose integrated tax, which otherwise pre-amendment was not to be paid on the re-import of goods. The fact that prior to the amendment, integrated tax was not required to be paid is clear from the provisions of the Customs Act, the Tariff Act and the decision of the Tribunal in InterGlobe Aviation. It cannot, therefore, be urged that despite the creation of a new liability to pay integrated tax under the Amendment Notification, the amendment would still be retrospective in nature.
*****
46. In the present case, though Explanation (d), inserted by the Amendment Notification dated 19 C/51929/2022 & 135 others 19.07.2021, proceeds to state that 'for removal of doubts' it is clarified, but the fact is that it imposes integrated tax, which otherwise prior to the introduction of the Explanation was not leviable under the unamended Exemption Notification dated 31.06.2017. It cannot, therefore, be said to be retrospective in nature, more so when neither clause (i) nor clause (ii) specifically mentions that it is retrospective in nature. Section 25(4) of the Customs Act also makes it abundantly clear that every Notification issued under sub-section (1) or sub-section (2A) of section 25 of the Customs Act shall, unless otherwise provided, come into force on the date of its issue by the Central Government for publication in the Official Gazette. At the cost of repetition, the Amendment Notification dated 19.07.2021 issued under section 25(1) does not provide that it would be applicable retrospectively. Thus, in terms of section 25(4) of the Customs Act, it would come into force on the date of its issue by the Central Government for publication in the Official Gazette.
47. Explanation (d), as would be seen, merely clarifies clause (i) of the Amendment Notification dated 19.07.2021. When both clause (i) and Explanation (d) are read together, the same meaning is arrived at. However, when Explanation (d) is compared with the un-amended Exemption Notification, different meanings come out.
*****
65. The aforesaid discussion leads to the inevitable conclusion that the Amendment Notification dated 19.07.2021 cannot be said to be retrospective in nature. Findings to the contrary recorded by the Commissioner (Appeals) in the impugned orders on the basis of the Circular dated 19.07.2021 issued by CBIC basis the minutes of the meeting of the GST Council cannot, therefore, be sustained. The orders impugned in all the 1714 appeals are, therefore, set aside and all the appeals are allowed."
(emphasis supplied) 20 C/51929/2022 & 135 others
21. For the reasons stated by the Division Bench of the Tribunal in InterGlobe Aviation Limited decided on 05.08.2024, it has to be held that the Amendment Notification dated 19.07.2021 cannot be said to be retrospective in nature. Findings to the contrary recorded by the Commissioner (Appeals) in the impugned orders on the basis of the Circular dated 19.07.2021 issued by CBIC basis the minutes of the meeting of the GST Council cannot, therefore, be sustained. The orders impugned in all the 136 appeals are, therefore, set aside and all the appeals are allowed.
(Dictated and pronounced in the open Court) (JUSTICE DILIP GUPTA) PRESIDENT (HEMAMBIKA R. PRIYA) MEMBER (TECHNICAL) HK