Custom, Excise & Service Tax Tribunal
Interglobe Aviation Ltd vs Commissioner, Customs-New Delhi (Acc ... on 5 August, 2024
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI
PRINCIPAL BENCH - COURT NO. 1
CUSTOMS APPEAL NO. 51937 OF 2021
(Arising out of Order-in-Appeal No. CC(A)-CUS/D-I/Import/NCH/422-1572/2021-22 dated
22.09.2021 passed by the Commissioner of Customs (Appeals), New Delhi)
InterGlobe Aviation Limited .....Appellant
Level-1, Tower-C, Global Business Park,
MG Road, Gurugram - 122002 (Haryana)
VERSUS
Commissioner of Customs .....Respondent
Air Cargo Complex (Import)
New Customs House, Near IGI Airport
New Delhi - 110037
WITH
CUSTOMS APPEALS OF THE YEAR 2021
51938 51979 52020 52106 52147 52191 52238
51939 51980 52021 52107 52148 52192 52245
51940 51981 52022 52108 52149 52193 52246
51941 51982 52023 52109 52150 52194 52247
51942 51983 52024 52110 52151 52195 52248
51943 51984 52066 52111 52152 52196 52249
51944 51985 52067 52112 52153 52197 52250
51945 51986 52068 52113 52154 52198 52251
51946 51987 52069 52114 52155 52199 52252
51947 51988 52070 52115 52156 52200 52253
51948 51989 52071 52116 52157 52201 52254
51949 51990 52073 52117 52158 52202 52255
51950 51991 52074 52118 52159 52203 52256
51951 51992 52075 52119 52160 52204 52257
51952 51993 52076 52120 52161 52211 52258
51953 51994 52077 52121 52162 52212 52259
51954 51995 52078 52122 52163 52213 52260
51955 51996 52079 52123 52164 52214 52261
51956 51997 52080 52124 52165 52215 52262
51957 51998 52081 52125 52166 52216 52263
51958 51999 52082 52126 52167 52217 52264
51959 52000 52083 52127 52168 52218 52265
51960 52001 52084 52128 52169 52219 52266
51961 52002 52085 52129 52170 52220 52267
51962 52003 52086 52130 52171 52221 52268
51963 52004 52087 52131 52175 52222 52269
51964 52005 52088 52132 52176 52223 52270
51965 52006 52089 52133 52177 52224 52271
51966 52007 52090 52134 52178 52225 52272
51967 52008 52091 52135 52179 52226 52273
51968 52009 52092 52136 52180 52227 52274
51969 52010 52093 52137 52181 52228 52275
2
C/51937/2021 &
1713 others
51970 52011 52094 52138 52182 52229 52276
51971 52012 52095 52139 52183 52230 52277
51972 52013 52096 52140 52184 52231 52278
51973 52014 52097 52141 52185 52232 52279
51974 52015 52098 52142 52186 52233 52280
51975 52016 52099 52143 52187 52234 52281
51976 52017 52103 52144 52188 52235 52282
51977 52018 52104 52145 52189 52236 52283
51978 52019 52105 52146 52190 52237 52284
AND
CUSTOMS APPEAL NO. 51228 OF 2020
(Arising out of Order-in-Appeal No. CC(A)-CUS/D-I/Import/NCH/208-226/2020-21 dated
29.07.2020 and Order-in-Appeal No. CC(A)-CUS/D-II/ICD-TKD-Import/349-363/2020-21
dated 29.07.2020 both passed by the Commissioner of Customs (Appeals), New Delhi)
InterGlobe Aviation Limited .....Appellant
Level-1, Tower-C, Global Business Park, MG Road,
Gurugram - 122002 (Haryana)
VERSUS
Commissioner of Customs .....Respondent
Air Cargo Complex (Import)
New Customs House, Near IGI Airport
New Delhi - 110037
WITH
CUSTOMS APPEALS OF THE YEAR 2020
51229 51234 51239 51244 51249 51254 51259
51230 51235 51240 51245 51250 51255 51260
51231 51236 51241 51246 51251 51256 51261
51232 51237 51242 51247 51252 51257 51262
51233 51238 51243 51248 51253 51258
AND
CUSTOMS APPEAL NO. 51266 OF 2020
(Arising out of Order-in-Appeal No. CC(A)-CUS/D-I/Import/NCH/227-600/2020-21 dated
30.07.2020 passed by the Commissioner of Customs (Appeals), New Delhi)
InterGlobe Aviation Limited .....Appellant
Level-1, Tower-C, Global Business Park,
MG Road, Gurugram - 122002 (Haryana)
VERSUS
3
C/51937/2021 &
1713 others
Commissioner of Customs .....Respondent
Air Cargo Complex (Import)
New Customs House, Near IGI Airport
New Delhi - 110037
WITH
CUSTOMS APPEALS OF THE YEAR 2020
51267 51299 51331 51363 51395 51427 51459
51268 51300 51332 51364 51396 51428 51460
51269 51301 51333 51365 51397 51429 51461
51270 51302 51334 51366 51398 51430 51462
51271 51303 51335 51367 51399 51431 51463
51272 51304 51336 51368 51400 51432 51464
51273 51305 51337 51369 51401 51433 51465
51274 51306 51338 51370 51402 51434 51466
51275 51307 51339 51371 51403 51435 51467
51276 51308 51340 51372 51404 51436 51468
51277 51309 51341 51373 51405 51437 51469
51278 51310 51342 51374 51406 51438 51470
51279 51311 51343 51375 51407 51439 51471
51280 51312 51344 51376 51408 51440 51472
51281 51313 51345 51377 51409 51441 51473
51282 51314 51346 51378 51410 51442 51474
51283 51315 51347 51379 51411 51443 51475
51284 51316 51348 51380 51412 51444 51476
51285 51317 51349 51381 51413 51445 51477
51286 51318 51350 51382 51414 51446 51478
51287 51319 51351 51383 51415 51447 51479
51288 51320 51352 51384 51416 51448 51480
51289 51321 51353 51385 51417 51449 51481
51290 51322 51354 51386 51418 51450 51482
51291 51323 51355 51387 51419 51451 51483
51292 51324 51356 51388 51420 51452 51484
51293 51325 51357 51389 51421 51453 51485
51294 51326 51358 51390 51422 51454 51486
51295 51327 51359 51391 51423 51455
51296 51328 51360 51392 51424 51456
51297 51329 51361 51393 51425 51457
51298 51330 51362 51394 51426 51458
AND
CUSTOMS APPEAL NO. 50001 OF 2021
(Arising out of Order-in-Appeal No. CC(A)-CUS/D-I/Import/NCH/227-600/2020-21 dated
30.07.2020 passed by the Commissioner of Customs (Appeals), New Delhi)
InterGlobe Aviation Limited .....Appellant
Level-1, Tower-C, Global Business Park,
MG Road, Gurugram - 122002 (Haryana)
VERSUS
4
C/51937/2021 &
1713 others
Commissioner of Customs .....Respondent
Air Cargo Complex (Import)
New Customs House, Near IGI Airport
New Delhi - 110037
WITH
CUSTOMS APPEALS OF THE YEAR 2021
50002 50024 50046 50068 50090 50112 50134
50003 50025 50047 50069 50091 50113 50135
50004 50026 50048 50070 50092 50114 50136
50005 50027 50049 50071 50093 50115 50137
50006 50028 50050 50072 50094 50116 50138
50007 50029 50051 50073 50095 50117 50139
50008 50030 50052 50074 50096 50118 50140
50009 50031 50053 50075 50097 50119 50141
50010 50032 50054 50076 50098 50120 50142
50011 50033 50055 50077 50099 50121 50143
50012 50034 50056 50078 50100 50122 50144
50013 50035 50057 50079 50101 50123 50145
50014 50036 50058 50080 50102 50124 50146
50015 50037 50059 50081 50103 50125 50147
50016 50038 50060 50082 50104 50126 50148
50017 50039 50061 50083 50105 50127 50149
50018 50040 50062 50084 50106 50128 50150
50019 50041 50063 50085 50107 50129 50151
50020 50042 50064 50086 50108 50130 50152
50021 50043 50065 50087 50109 50131 50153
50022 50044 50066 50088 50110 50132
50023 50045 50067 50089 50111 50133
AND
CUSTOMS APPEAL NO. 50101 OF 2022
(Arising out of Order-in-Appeal No. CC(A)-CUS/D-I/Import/NCH/422-1572/2021-22
dated 22.09.2021 passed by the Commissioner of Customs (Appeals), New Delhi)
InterGlobe Aviation Limited .....Appellant
Level-1, Tower-C, Global Business Park, MG Road,
Gurugram - 122002 (Haryana)
VERSUS
Commissioner of Customs .....Respondent
Air Cargo Complex (Import)
New Customs House, Near IGI Airport
New Delhi - 110037
WITH
CUSTOMS APPEALS OF THE YEAR 2022
50102 50235 50397 50516 50676 50811 50929
50103 50236 50398 50517 50677 50812 50930
5
C/51937/2021 &
1713 others
50104 50237 50399 50518 50678 50813 50931
50105 50238 50400 50519 50679 50814 50932
50106 50239 50401 50520 50680 50815 50933
50107 50240 50402 50521 50681 50816 50934
50108 50241 50403 50522 50682 50817 50935
50109 50242 50404 50523 50683 50818 50936
50110 50243 50405 50524 50684 50819 50937
50111 50244 50406 50525 50685 50820 50938
50112 50245 50407 50526 50686 50821 50939
50113 50246 50408 50527 50687 50822 50940
50114 50247 50409 50528 50688 50823 50941
50115 50248 50410 50529 50689 50824 50942
50116 50249 50411 50530 50690 50825 50943
50117 50250 50412 50531 50691 50826 50944
50118 50251 50413 50532 50692 50827 50945
50119 50252 50414 50533 50693 50828 50946
50120 50253 50415 50534 50694 50829 50947
50136 50254 50416 50535 50695 50830 50948
50137 50255 50417 50578 50696 50831 50949
50138 50256 50418 50579 50697 50832 50950
50139 50257 50419 50580 50698 50833 50951
50140 50258 50420 50581 50699 50834 50952
50141 50259 50421 50582 50700 50835 50953
50142 50260 50422 50583 50701 50836 50954
50143 50261 50423 50584 50702 50837 50955
50144 50262 50424 50585 50703 50838 50956
50145 50307 50425 50586 50704 50839 50957
50146 50308 50426 50587 50705 50840 50958
50147 50309 50427 50588 50706 50841 50959
50148 50310 50428 50589 50707 50842 50960
50149 50311 50429 50590 50708 50843 50961
50150 50312 50430 50591 50709 50844 50962
50151 50313 50431 50592 50710 50845 50963
50152 50314 50432 50593 50711 50846 50964
50153 50315 50433 50594 50712 50847 50965
50154 50316 50434 50595 50713 50848 50966
50155 50317 50435 50596 50714 50849 50967
50156 50318 50436 50597 50715 50850 50968
50157 50319 50437 50598 50716 50851 50969
50158 50320 50438 50599 50717 50852 50970
50159 50321 50439 50600 50718 50853 50971
50160 50322 50440 50601 50719 50854 50972
50161 50323 50441 50602 50720 50855 50973
50162 50324 50442 50603 50721 50856 50974
50163 50325 50443 50604 50722 50857 50975
50164 50326 50444 50605 50723 50858 50976
50165 50327 50445 50606 50724 50859 50977
50166 50328 50446 50607 50725 50860 50978
50167 50329 50447 50608 50726 50861 50979
50168 50330 50448 50609 50727 50862 50980
50169 50331 50449 50610 50728 50863 50981
50170 50332 50450 50611 50729 50864 50982
50171 50333 50451 50612 50730 50865 50983
50172 50334 50452 50613 50731 50866 50984
50173 50335 50453 50614 50732 50867 50985
6
C/51937/2021 &
1713 others
50174 50336 50454 50615 50733 50868 50986
50175 50337 50455 50616 50734 50869 50987
50176 50338 50456 50617 50735 50870 50988
50177 50339 50457 50618 50736 50871 50989
50178 50340 50458 50619 50737 50872 50990
50179 50341 50459 50620 50738 50873 50991
50180 50342 50460 50621 50739 50874 50992
50181 50343 50461 50622 50740 50875 50993
50182 50344 50462 50623 50741 50876 50994
50183 50345 50463 50624 50742 50877 50995
50184 50346 50464 50625 50743 50878 50996
50185 50347 50465 50626 50744 50879 50997
50186 50348 50466 50627 50745 50880 50998
50187 50349 50467 50628 50746 50881 50999
50188 50350 50468 50629 50747 50882 51000
50189 50351 50469 50630 50748 50883 51001
50190 50352 50470 50631 50749 50884 51002
50191 50353 50471 50632 50750 50885 51003
50192 50354 50472 50633 50751 50886 51004
50193 50355 50473 50634 50752 50887 51005
50194 50356 50474 50635 50753 50888 51006
50195 50357 50475 50636 50754 50889 51007
50196 50358 50476 50637 50755 50890 51008
50197 50359 50477 50638 50756 50891 51009
50198 50360 50478 50639 50757 50892 51010
50199 50361 50479 50640 50758 50893 51011
50200 50362 50480 50641 50776 50894 51012
50201 50363 50481 50642 50777 50895 51013
50202 50364 50482 50643 50778 50896 51014
50203 50365 50483 50644 50779 50897 51015
50204 50366 50484 50645 50780 50898 51016
50205 50367 50485 50646 50781 50899 51017
50206 50368 50486 50647 50782 50900 51018
50207 50369 50487 50648 50783 50901 51019
50208 50370 50488 50649 50784 50902 51020
50209 50371 50489 50650 50785 50903 51021
50210 50372 50490 50651 50786 50904 51022
50211 50373 50491 50652 50787 50905 51023
50212 50374 50492 50653 50788 50906 51024
50213 50375 50493 50654 50789 50907 51025
50214 50376 50494 50655 50790 50908 51026
50215 50377 50495 50656 50791 50909 51027
50216 50378 50496 50657 50792 50910 51028
50217 50379 50498 50658 50793 50911 51029
50218 50380 50499 50659 50794 50912 51030
50219 50381 50500 50660 50795 50913 51031
50220 50382 50501 50661 50796 50914 51032
50221 50383 50502 50662 50797 50915 51033
50222 50384 50503 50663 50798 50916 51034
50223 50385 50504 50664 50799 50917 51035
50224 50386 50505 50665 50800 50918 51036
50225 50387 50506 50666 50801 50919 51037
50226 50388 50507 50667 50802 50920 51038
50227 50389 50508 50668 50803 50921 51039
50228 50390 50509 50669 50804 50922 51040
7
C/51937/2021 &
1713 others
50229 50391 50510 50670 50805 50923 51041
50230 50392 50511 50671 50806 50924 51042
50231 50393 50512 50672 50807 50925 51043
50232 50394 50513 50673 50808 50926 51044
50233 50395 50514 50674 50809 50927 51045
50234 50396 50515 50675 50810 50928
AND
CUSTOMS APPEAL NO. 50028 OF 2022
(Arising out of Order-in-Appeal No. CC(A)-CUS/D-I/Import/NCH/1577-1612/2021-22
dated 22.09.2021 passed by the Commissioner of Customs (Appeals), New Delhi)
SpiceJet Limited .....Appellant
319, Udyog Vihar, Phase-IV,
Gurugram - 122016 (Haryana)
VERSUS
Commissioner of Customs .....Respondent
Air Cargo Complex (Import)
New Customs House, Near IGI Airport
New Delhi - 110037
WITH
CUSTOMS APPEALS OF THE YEAR 2022
50029 50033 50037 50041 50045 50049 50053
50030 50034 50038 50042 50046 50050 50054
50031 50035 50039 50043 50047 50051 50055
50032 50036 50040 50044 50048 50052
AND
CUSTOMS APPEAL NO. 54503 OF 2023
(Arising out of Order-in-Appeal No. CC(A)-CUS/D-I/Import/NCH/4802-6075/2022-23
dated 30.11.2022 passed by the Commissioner of Customs (Appeals), New Delhi)
InterGlobe Aviation Limited .....Appellant
Level-1, Tower-C, Global Business Park,
MG Road, Gurugram - 122002 (Haryana)
VERSUS
Commissioner of Customs .....Respondent
Air Cargo Complex (Import)
New Customs House, Near IGI Airport
New Delhi - 110037
AND
8
C/51937/2021 &
1713 others
CUSTOMS APPEALS OF THE YEAR 2023
54504 54527 54550 54573 54596 54619 54642
54505 54528 54551 54574 54597 54620 54643
54506 54529 54552 54575 54598 54621 54644
54507 54530 54553 54576 54599 54622 54645
54508 54531 54554 54577 54600 54623 54646
54509 54532 54555 54578 54601 54624 54647
54510 54533 54556 54579 54602 54625 54648
54511 54534 54557 54580 54603 54626 54649
54512 54535 54558 54581 54604 54627 54650
54513 54536 54559 54582 54605 54628 54651
54514 54537 54560 54583 54606 54629 54652
54515 54538 54561 54584 54607 54630 54653
54516 54539 54562 54585 54608 54631 54654
54517 54540 54563 54586 54609 54632 54655
54518 54541 54564 54587 54610 54633 54656
54519 54542 54565 54588 54611 54634 54657
54520 54543 54566 54589 54612 54635 54658
54521 54544 54567 54590 54613 54636 54659
54522 54545 54568 54591 54614 54637 54660
54523 54546 54569 54592 54615 54638 54661
54524 54547 54570 54593 54616 54639 54662
54525 54548 54571 54594 54617 54640 54663
54526 54549 54572 54595 54618 54641 54664
54665
APPEARANCE:
Shri B.L. Narasimhan, Ms. Jyoti Pal and Ms. Anjali Singh, Advocates for the
Appellant
Shri S.K. Rehman, Authorized Representative of the Department
CORAM:
HON'BLE MR. JUSTICE DILIP GUPTA, PRESIDENT
HON'BLE MR. P.V. SUBBA RAO, MEMBER (TECHNICAL)
DATE OF HEARING: 23.07.2024
DATE OF DECISION: 05.08.2024
FINAL ORDER NO's. 56224-57937/2024
9
C/51937/2021 &
1713 others
JUSTICE DILIP GUPTA :
The issue that arises for consideration in all these 1714 appeals is
whether Notification No. 36/2021-Customs dated 19.07.20211 issued
under section 25(1) of the Customs Act, 19622 amending Notification No.
45/2017-Customs dated 30.06.20173 would have retrospective effect from
the date the Exemption Notification was issued on 30.06.2017.
2. InterGlobe Aviation Limited and SpiceJet Limited4 are scheduled
airline operators engaged in the business of transportation of passengers
and goods by air. In order to carry out the scheduled operations in India,
the appellant imported aircrafts and it is stated that when the engines/
auxiliary power units or other parts of the aircrafts began to develop
defects, they were exported out of India for repairs and the aircrafts also
had to be exported out of India for repairs and maintenance. The repaired
parts/aircrafts are thereafter re-imported into India and at the time of re-
import, Bills of Entry are filed.
3. A dispute had earlier arisen as to whether the appellant would be
justified in claiming exemption of integrated tax under the Exemption
Notification on re-import of repaired parts/ aircrafts into India during the
period from August, 2017 to March, 2019. The appellant had claimed
exemption from integrated tax under the Exemption Notification for the
reason that the importer is required to only pay 'duty of customs' on the
fair cost of repairs and the cost of insurance and freight charges, both
ways and not the integrated tax. The Customs Authorities, however, did
not agree on this issue with the appellant, as according to them the
1. the Amendment Notification
2. the Customs Act
3. the Exemption Notification
4. the appellant
10
C/51937/2021 &
1713 others
appellant was not entitled to exemption from integrated tax since the
phrase 'duty of customs' at serial no. 2 of the Exemption Notification,
includes both the basic customs duty as also integrated tax. Thus,
according to the Customs Authorities, the appellant was required to pay
integrated tax, in addition to the basic customs duty, on the fair cost of
repairs and the cost of insurance and freight charges, both ways. The
Commissioner disallowed the integrated tax exemption claimed by the
appellant and integrated tax was levied on the fair cost of repairs and the
cost of insurance and freight charges. It is against the aforesaid order that
the appellant had earlier filed appeals before the Tribunal. The appeals
were allowed by the Tribunal by order dated 02.11.2020 in InterGlobe
Aviation Ltd. vs. Commissioner of Customs, New Delhi5 holding that
the appellant would be entitled to exemption from payment of integrated
tax under the Exemption Notification on re-import of repaired
parts/aircrafts into India.
4. Before adverting to the reasons assigned by the Division Bench of
the Tribunal for taking the aforesaid view, it would be appropriate to
reproduce the relevant portions of the Exemption Notification dated
30.06.2017 and they 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
5. 2020 (43) G.S.T.L. 410 (Tri. - Del.)
11
C/51937/2021 &
1713 others
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. No. Description of goods Conditions
(1) (2) (3)
1. ***** *****
2. Goods, other than Duty of customs which
those falling under Sl would be leviable if the
No. 1 exported for value of re-imported
repairs abroad 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.
3-5 ***** *****
Explanation. - *****
(a) *****
(b) *****
(c) *****"
(emphasis supplied)
5. It was mainly sought to be contended on behalf of the appellant in
the aforesaid appeals decided by the Tribunal that:
(i) Duty of customs, as mentioned in the conditions for serial
no. 2 of the Exemption Notification, cannot be interpreted
to include integrated tax within its purview since a plain
reading of the Exemption Notification clearly denotes that
what is payable in terms of serial no. 2 is the duty of
customs on the fair cost of repairs carried out including to
and fro freight charges. All the other duties / taxes,
12
C/51937/2021 &
1713 others
including integrated tax and compensation cess, are
wholly exempted under the Exemption Notification;
(ii) The Exemption Notification has consciously used two
different expressions duty of customs and integrated tax
at different places in the Notification, and so the same
have to be understood differently and one cannot be
substituted with the other;
(iii) Where the language of any Notification is unambiguous,
the plain meaning has to be assigned to such
unambiguous language; and
(iv) Integrated tax is not a duty of customs and, therefore
aircrafts/ parts on re-import after repairs overseas are
eligible for full exemption from integrated tax under the
Exemption Notification.
6. The Division Bench, 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, 19756 and to the judgments of the Supreme Court in Prestige
Engineering (India) Limited vs. Collector of C., Excise, Meerut7,
Collector of Customs, Madras vs. Indian Organic Chemicals Limited8
and M/s. Unicorn Industries vs. Union of India and others9 and the
judgment of the Bombay High Court in Ceat Tyres of India Limited vs.
Union of India10 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
6. the Tariff Act
7. 1994 (73) E.L.T. 497 (S.C.)
8. 2000 (118) E.L.T. 3 (S.C.)
9. 2019 (370) E.L.T. 3 (S.C.)
10. 1992 (57) E.L.T. 221 (Bom.)
13
C/51937/2021 &
1713 others
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
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 Tax11 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.
7. 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)
11. the integrated tax
14
C/51937/2021 &
1713 others
8. 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 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)
9. The appeals were allowed by the Tribunal by a decision dated 02.11.2020 and the operative part of the order is reproduced below: 15
C/51937/2021 & 1713 others "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 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)
10. It needs to be noted that the said decision of the Tribunal in InterGlobe Aviation was assailed by the department before the Supreme Court and Civil Appeals are pending. It has also been stated that no stay has been granted by the Supreme Court.
11. 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.
12. 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 16 C/51937/2021 & 1713 others 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: -
"(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)
13. On the same date, the Central Board of Indirect Taxes and Customs12 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
12. CBIC 17 C/51937/2021 & 1713 others 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 ***** 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.18
C/51937/2021 & 1713 others
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 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, 19 C/51937/2021 & 1713 others 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 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, 20 C/51937/2021 & 1713 others 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)
14. The Commissioner, 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. The relevant portions of the order of the Commissioner are reproduced below:
"5.4 From this, it is abundantly clear that the intent of the GST Council, the supreme Constitutional body for making policy in respect of GST, has always been to levy IGST on such imports. In fact, this intent flows from the fact that such imports were subjected to Additional Duty of Customs also prior to introduction of GST in terms of Notification No. 94/96-Cus dated 16.12.1996. It is also evident that the GST Council has made its intent clear on several occasions. In light of this. I respectfully note that the impugned goods shall be liable to integrated tax and the exemption from the same is not available to them. Since position of law and legislative intent has been made abundantly clear by the GST Council itself, the cited judgments of Hon'ble Tribunal are distinguishable and I respectfully follow the clarification issued by the GST Council.
5.5 I also note that, CBIC has issued Notification No. 36/2021-Customs dated 19th July, 2021 wherein 21 C/51937/2021 & 1713 others Notification No. 45/2017-Customs has been amended suitably. ***** ***** 5.6 Conjoint reading of Circular No 16/2021-Cus dated 19.07.2021 and the said notification make it crystal clear that the explanation 'd' is clarificatory in nature. The intentions of GST council amplified in the said circular have been implemented by this amendment. As it had always been intention of the legislature that IGST should be leviable on such re-imports, the explanation added in the notification 45/2017-Cus by Notification No 36/2021-Customs dated 19.07.2021 will have retrospective effect as it does not change position of law but only clarifies it in more specific terms.
5.7 The Appellant has contended that the amendment done by Notification no. 36/2021-Cus dated 19.07.2021 has changed position of law and has to be prospective in nature. They have cited certain case laws in this regard. I note that cited case laws relate to Income tax Act and not Customs Act, 1962 or exemption there under. Secondly, as evident from Circular No. 16/2021-Cus dated 19.07.2021, the legislative intent was always to levy IGST on impugned imports. In fact, prior to GST, such imports were subjected to Additional Duty of Customs also. Thus the amendment done to clarify this position by way of an explanation has to be construed retrospectively. I refer to ruling of the Hon'ble Supreme Court in case of W.P.I.L. Ltd. vs. Commissioner of Central Excise, Meerut, U.P. [2005 (181) E.L.T. 359 (S.C.)] which held that clarificatory notification shall have retrospective effect.***** ***** As can be noted, in the above quoted case, the policy of the Government had remained consistent and hence a clarificatory amendment was held to be retrospective in preset case also, the policy of the GST Council as well as the Government had been consistent and hence the explanation 'd' has to be considered to have retrospective application.22
C/51937/2021 & 1713 others 5.8 ***** It may be noted that the legislative intent has been clearly indicated in Circular No. 16/2021-Cus dated 19.07.2021 and for implementation of the same, explanation 'd' has been introduced. Thus explanation 'd' need to be considered to have retrospective effect.
***** 5.10 From above two paragraphs, it is evident that legislative intent is paramount and any interpretation which goes against such intent has to be negated. In the case at hand, the legislative intent has been made amply clear by the Circular No 16/2021- Cus dated 19.07.2021. This leaves no scope in interpreting that explanation 'd' in Notification no. 45/2017-Cus as added by Notification No 36/2021- Customs dated 19.07.2021 has to be considered to have retrospective effect.
5.11 In view of above discussion and findings, I have not reasons to differ from the impugned assessments wherein IGST has been levied on impugned imports as it is in accordance with the legislative intent."
(emphasis supplied)
15. Shri B.L. Narasimhan, learned counsel for the appellant assisted by Ms. Jyoti Pal and Ms. Anjali Singh 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 23 C/51937/2021 & 1713 others Customs (General), New Delhi13; Jet Airways India Ltd. vs. Commissioner of Customs (Import), Mumbai14; M/s. Jet Airways (India) Ltd. vs. Commissioner of Customs (Air Cargo)15; and Jet Airways (India) Ltd. vs. Commissioner of Customs16;
(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;
(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 Complex17;
(v) The amendments made by the Amendment Notification are not 'clarificatory'. They are substantive amendments and hence, cannot be given retrospective operation. A
13. 2021 (1) TMI 663 - CESTAT New Delhi
14. 2021 (2) TMI 1113 - CESTAT Mumbai
15. 2021 (9) TMI 1134 - CESTAT Chennai
16. 2021 (1) TMI 577 - CESTAT New Delhi
17. 2020 (371) E.L.T. 501 (Del.) 24 C/51937/2021 & 1713 others 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 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 another18; and
18. 2005 (11) TMI 25-SC 25 C/51937/2021 & 1713 others
(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 & Customs19.
16. Shri S.K. Rehman, 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;
(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 Association20; the decision of the Tribunal in Principal Commissioner of CGST vs.
19. 1978 (2) E.L.T. J 350 (S.C.)
20. 2005 (187) E.L.T. 162 (S.C.) 26 C/51937/2021 & 1713 others M/s. OM Fragrances21; 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 India22;
(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
(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.
17. The submissions advanced by the learned counsel for the appellant and the learned authorized representative appearing for the department have been considered.
18. Section 12 of the Customs Act provides that except as otherwise provided in the Customs Act, or any other law for the time being in force, duties of customs shall be levied at such rates as may be specified under
21. Excise Appeal No. 51718 of 2018 decided on 29.09.2022
22. 2018 (364) E.L.T. 27 (Mad.) 27 C/51937/2021 & 1713 others the Tariff Act or any other law for the time being in force, on goods imported into, or exported from, India. Section 2 of the Tariff Act stipulates that the rates at which duties of customs shall be levied under the Customs Act have been specified in the First and Second Schedules. Section 3 of the Tariff Act provides for levy of additional duty equal to excise duty, sales tax, local taxes and other charges.
19. Section 25 of the Customs Act deals with power to grant exemption from duty. It is reproduced below:
"Section 25. Power to grant exemption from duty. -
(1) If the Central Government is satisfied that it is necessary in the public interest so to do, it may, by notification in the Official Gazette, exempt generally either absolutely or subject to such conditions to be fulfilled before or after clearance as may be specified in the notification goods of any specified description from the whole or any part of duty of customs leviable thereon.
(2) If the Central Government is satisfied that it is necessary in the public interest so to do, it may, by special order in each case, exempt from the payment of duty, under circumstances of an exceptional nature to be stated in such order, any goods on which duty is leviable.
(2A) The Central Government may, if it considers it necessary or expedient so to do for the purpose of clarifying the scope or applicability of any notification issued under sub-section (1) or order issued under sub-
section (2), insert an explanation in such notification or order, as the case may be, by notification in the Official Gazette, at any time within one year of issue of the notification under sub-section (1) or order under sub- section (2), and every such explanation shall have effect as if it had always been the part of the first such notification or order, as the case may be.
28
C/51937/2021 & 1713 others (3) An exemption under sub-section (1) or sub- section (2) in respect of any goods from any part of the duty of customs leviable thereon (the duty of customs leviable thereon being hereinafter referred to as the statutory duty) may be granted by providing for the levy of a duty on such goods at a rate expressed in a form or method different from the form or method in which the statutory duty is leviable and any exemption granted in relation to any goods in the manner provided in this sub-section shall have effect subject to the condition that the duty of customs chargeable on such goods shall in no case exceed the statutory duty. Explanation.- "Form or method", in relation to a rate of duty of customs, means the basis, namely, valuation, weight, number, length, area, volume or other measure with reference to which the duty is leviable.
(4) Every notification issued under sub-section (1) or sub-section (2A) shall, unless otherwise provided, come into force on the date of its issue by the Central Government for publication in the Official Gazette."
20. 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. 29
C/51937/2021 & 1713 others
21. 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.
22. 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 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.
23. Learned authorized representative appearing for the Department, however, submitted that some relevant facts could not be pointed out to the Tribunal when the arguments were advanced before the Bench in InterGlobe Aviation. In this connection, learned authorized representative pointed out, while making reference to the Exemption Notification dated 30.06.2017, that there is a difference between the terms 'duty of customs' and 'duty of customs leviable under the First Schedule'. Learned authorized representative, therefore, submitted that 'duty of customs' would include 'basic customs duty and integrated tax'. Learned authorized representative also pointed out that the Exemption Notification No. 94/96 dated 16.12.1996 was required to be considered while appreciating the subsequent Exemption Notification dated 30.06.2017, but this was not done.
30
C/51937/2021 & 1713 others
24. Learned counsel for the appellant, however, pointed out that both the aforesaid submissions were considered and examined by the Division Bench of the Tribunal in InterGlobe Aviation.
25. A perusal of the decision rendered by the Tribunal in InterGlobe Aviation does reveal that both the aforesaid submissions were considered. The decision rendered by the Tribunal in InterGlobe Aviation was subsequently followed by at least five Division Benches of the Tribunal. There is no good reason to take a different view.
26. 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.
27. In all the appeals, the Bills of Entry were filed for the period prior to the issuance of the Amendment Notification dated 19.07.2021. They would, therefore, be covered by the un-amended Exemption Notification dated 30.06.2017. The decision of the Tribunal in InterGlobe Aviation would, therefore, govern all the appeals.
31
C/51937/2021 & 1713 others
28. However, two submissions have been made by the department. The first is that the some important facts could not be placed before the Tribunal in InterGlobe Aviation and, therefore, it should be reconsidered; and the second is that the Amendment Notification, though issued on 19.07.2021, would have retrospective effect from the date the Exemption Notification was issued on 30.06.2017. The contention, therefore, is that the appellant would have to pay the integrated tax also for the period from 30.06.2017 upto 19.07.2021, which otherwise was not leviable under the un-amended Exemption Notification. The Commissioner (Appeals) has accepted this contention of the department, which decision of the Commissioner (Appeals) has been assailed in these appeals.
29. The first contention of the department has been considered in the earlier part of this order.
30. To examine whether the Exemption Notification dated 19.07.2021 can have retrospective effect, it would be necessary to examine the provisions of sub-sections (1), (2A) and (4) of section 25 of the Customs Act. While sub-section (1) gives power to the Central Government to exempt generally, either absolutely or subject to such conditions as may be specified in the notification, goods of any specified description from the whole or any part of duty of customs leviable thereon, sub-section (2A) empowers the Central Government, for the purpose of clarifying the scope or applicability of any notification issued under sub-section (1), to insert an Explanation in such notification at any time within one year of issue of the notification under sub-section (1), and every such Explanation shall have effect as if it had always been the part of the first such notification. Sub- section (4) of section 25 of the Customs Act specifically states that every 32 C/51937/2021 & 1713 others notification issued under sub-sections (1) or (2A) shall, unless otherwise provided, come into force on the date of its issue by the Central Government for publication in the Official Gazette.
31. The Exemption Notification dated 19.07.2021 was not issued under sub-section (2A) of section 25 of the Customs Act. It was issued under sub-section (1) of section 25 of the Customs Act. In any case, a notification under sub-section (2A) of section 25 of the Customs Act can be issued only within one year from the date of issuance of the notification under sub-section (1) of section 25 of the Act. In the present case, as the Exemption Notification was issued on 30.06.2017 under sub-section (1) of section 25 of the Customs Act, the notification under sub-section (2A) of the Customs Act could have been issued only on or before 29.06.2016.
32. 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.
33. 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.
34. 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 33 C/51937/2021 & 1713 others 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.
30. This view finds support from the judgment of the Meghalaya High Court in Border Trade & Chamber of Commerce, Moreh Town vs. Union of India and others23. The High Court held that if any explanation is inserted in a notification for the purpose of clarifying the scope and applicability, the same can be issued only within one year of the date of issuance of the principal notification, as contemplated under sub-section (2A) of the Customs Act and since the amending notification issued under sub-section (1) does not provide anything otherwise, it would come into force on the date of issuance and not before. The relevant portion of the judgment of the High Court is reproduced below:
"Thus, as per Sub-section (2A) of Section 25 ibid., if any explanation was to be inserted in the notification for the purpose of clarifying the scope and applicability, the same was required to be issued within one year of the date of issuance of the principal notification. Obviously, the notification as issued on 27.01.2017 is not the one issued under Sub-section (2A) of Section 25 of the Act of 1962. Moreover, the notification itself clearly states that the same has been issued in exercise of the powers conferred by Sub Section (1) of Section 25 of the Act of 1962 for the purpose of amendment of the principal notification dated 13.08.2008. In the notification dated 27.01.2017, nothing has otherwise been provided as regards the date of its enforcement. Therefore, it remains beyond the pale of doubt that its operation would be governed by Clause (a) of Sub- section (4) of Section 25; and, accordingly, it has come into force on the date of issuance and not before."
(emphasis supplied)
23. 2017 (4) TMI 142 - Meghalaya High Court 34 C/51937/2021 & 1713 others
31. The provisions of clauses (i) and (ii) of the Amendment Notification dated 19.07.2021 can also be independently examined to find out whether the Amendment Notification would have retrospective effect.
32. Clause (i) of the Amendment Notification dated 19.07.2021 provides that against serial numbers 2 and 3, in column (3), for the words 'Duty of customs', the words 'Said duty, tax or cess' shall be substituted. Clause (ii) seeks to insert Explanation (d) to the Exemption Notification. It states 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 as leviable under the said Tariff Act, besides the customs duty', 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.
33. The department seeks to take aid of Explanation (d) that was inserted by the Amendment Notification dated 19.07.2021 to contend that since the words 'for removal of doubt' and 'it is clarified' have been used in Explanation (d), the amendment contained in clause (1) would necessarily have retrospective effect.
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 35 C/51937/2021 & 1713 others 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 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 36 C/51937/2021 & 1713 others 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.
37. In this connection, it would be pertinent to refer to the judgment of the Supreme Court in Sedco Forex International. The Supreme Court, in the context of an Explanation that was added to section 9(1)(ii) of the Income Tax Act, 1961 to overcome the decision of the Gujarat High Court, observed that an explanation to a provision may either clear the ambiguity in the main provision or may add and widen the scope of the main section. If it clarifies, it may be given retrospective effect, but if it changes the law it must not be presumed to be retrospective, despite the use of 'it is declared' or 'for removal of doubts'. The relevant portions of the judgment of the Supreme Court are reproduced below:
"5.3 ***** As was affirmed by this Court in Goslino Mario [2000] 241 ITR 314, a cardinal principle of the tax law is that the law to be applied is that which is in force in the relevant assessment year unless otherwise provided expressly or by necessary implication. [See also: Reliance Jute and Industries vs. CIT (1980) 1 SCC 139]. An Explanation to a statutory provision may fulfil the purpose of clearing up an ambiguity in 37 C/51937/2021 & 1713 others the main provision or an Explanation can add to and widen the scope of the main section. If it is in its nature clarificatory then the Explanation must be read into the main provision with effect from the time that the main provision came into force. But if it changes the law it is not presumed to be retrospective irrespective of the fact that the phrases used are 'it is declared' or 'for the removal of doubts'.
There was and is no ambiguity in the main provision of section 9(1)(ii). It includes salaries in the total income of an assessee if the assessee has earned it in India. The word "earned" had been judicially defined in S.G. Pgnatale [1980] 124 ITR 391 by the High Court of Gujarat, in our view, correctly, to mean income "arising or accruing in India". The amendment to the section by way of an Explanation in 1983 effected a change in the scope of that judicial definition so as to include with effect from 1979, "income payable for service rendered in India" When the Explanation seeks to give an artificial meaning to "earned in India"
and bring about a change effectively in the existing law and in addition is stated to come into force with effect from a future date, there is no principle of interpretation which would justify reading the Explanation as operating retrospectively."
(emphasis supplied)
38. This decision of the Supreme Court in Sedco Forex International was considered and relied upon by the Supreme Court in M.M. Aqua Technologies Ltd. Vs. Commissioner of Income Tax, Delhi-III24 and it was held:
"22. Second, a retrospective provision in a tax act which is "for the removal of doubts" cannot be presumed to be retrospective, even where such language is used, if it alters or changes the law as it 24 . 2021 (8) TMI 520 - Supreme Court 38 C/51937/2021 & 1713 others earlier stood. This was stated in Sedco Forex International Drill. Inc. v. CIT, (2005) 12 SCC 717 as follows:***** *****
23. This being the case, Explanation 3C is clarificatory
- it explains Section 43B(d) as it originally stood and does not purport to add a new condition retrospectively, as has wrongly been held by the High Court"
39. In Virtual Soft Systems Ltd. vs. Commissioner of Income Tax25, the Supreme Court observed :
"54. Even if the statute does contain a statement to the effect that the amendment is declaratory or clarificatory, that is not the end of the matter. The Court will not regard itself as being bound by the said statement made in the statute but will proceed to analyse the nature of the amendment and then conclude whether it is in reality a clarificatory or declaratory provision or whether it is an amendment which is intended to change the law and which applies to future periods. In this connection, see the following:-
*****
56. Otherwise also, it has been consistently held that a provision must be read subject to the rule that in the absence of an express provision or clear implication, the Legislature does not intend to attribute to the amending provision, a greater retrospectivity than is expressly mentioned. It is settled law that a taxing provision imposing liability is governed by the normal presumption that is not retrospective.
*****
59. There is nothing in the language of Section 271(1)(c) as amended by the Finance Act, 2002 w.e.f. 1.4.2003 to suggest that the
25. 2007 (2) TMI 147 - Supreme Court 39 C/51937/2021 & 1713 others amendment is retrospective. The amendment in clause (iii) and simultaneously in Explanation 4(a) carried out enlarges the scope of penalty under Section 271(1)(c) to include even cases where assessment has been completed at loss.
The same being in the nature of a substantive amendment would be prospective, in the absence of any indication to the contrary *****"
(emphasis supplied)
40. In Union of India & Ors. vs. M/s Martin Lottery Agencies Ltd.26, the Supreme Court held:
"24. ***** The explanation, in our opinion, cannot be said to be a simple clarification as it introduces a new concept stating that organizing of the lottery is a form of entertainment. ***** The Explanation so read appears to be a charging provision. It states about taxing need. It can be termed to be a sui generis tax. If it is a different kind of tax, the same may be held to be running contrary to the ordinary concept of service tax. It may, thus, be held to be a stand alone clause. A constitutional question may have to be raised and answered as to whether the taxing power can be segregated. If by reason of the said explanation, the taxing net has been widened, it cannot be held to be retrospective in operation.
No doubt, the explanation begins with the words `for removal of doubts'. Does it mean that it is conclusive in nature? In law, it is not. It is not a case where by reason of a judgment of a court, the law was found to be vague or ambiguous. There is also nothing to show that it was found to be vague or ambiguous by the executive. In fact, the Board circular shows that invocation of clause (ii) had never been in contemplation of the taxing authorities.
*****
26. 2009 (5) TMI 1 - Supreme Court 40 C/51937/2021 & 1713 others
36. It is, therefore, evident that by reason of an explanation, a substantive law may also be introduced. If a substantive law is introduced, it will have no retrospective effect.
The notice issued to the assessee by the appellant has, thus, rightly been held to be liable to be set aside. Subject to the constitutionality of the Act, in view of the explanation appended to this, we are of the opinion that the service tax, if any, would be payable only with effect from May, 2008 and not with retrospective effect.
37. In a case of this nature, the Court must be satisfied that the Parliament did not intend to introduce a substantive change in the law. As stated hereinbefore, for the aforementioned purpose, the expressions like 'for the removal of doubts' are not conclusive. The said expressions appear to have been used under assumption that organizing games of chance would be rendition of service. We are herein not concerned as to whether it was constitutionally permissible for the Parliament to do so as we are not called upon to determine the said question but for our purpose, it would be suffice to hold that the explanation is not clarificatory or declaratory in nature."
(emphasis supplied)
41. The aforesaid decision of the Supreme Court in Martin Lottery Agencies was followed by the Supreme Court in Sree Sankaracharya University of Sanskrit & Ors. vs. Dr. Manu & Anr.27. The Supreme Court distinguished the role of a clarificatory/explanation from that of a substantive amendment and held that an explanation/clarification cannot expand or alter the scope of the original provision. The relevant portion of the judgment of the Supreme Court is reproduced below :
27. 2023 (5) TMI 1246 -Supreme Court 41 C/51937/2021 & 1713 others "9.2 From the aforesaid authorities, the following principles could be culled out:
i) If a statute is curative or merely clarificatory of the previous law, retrospective operation thereof may be permitted.
ii) In order for a subsequent order/ provision/amendment to be considered as clarificatory of the previous law, the pre-
amended law ought to have been vague or ambiguous. It is only when it would be impossible to reasonably interpret a provision unless an amendment is read into it, that the amendment is considered to be a clarification or a declaration of the previous law and therefore applied retrospectively.
iii) An explanation/clarification may not expand or alter the scope of the original provision.
iv) Merely because a provision is described as a clarification/explanation, the Court is not bound by the said statement in the statute itself, but must proceed to analyse the nature of the amendment and then conclude whether it is in reality a clarificatory or declaratory provision or whether it is a substantive amendment which is intended to change the law and which would apply prospectively."
42. The Bombay High Court and the Delhi High Court have also examined this position.
43. In Greatship (India) Ltd. vs. Commissioner of Service Tax, Mumbai28, the Bombay High Court examined whether the Notification dated 27.02.2010 was clarificatory in nature or whether it resulted in a substantive change in law and made the following observation:
"19. From the analysis of the aforesaid judgments of the Apex Court, it would be clear that if the statute uses the words "it is declared" or "it is clarified for removal of doubts", then it will be presumed that the amending law is declaratory or
28. 2015 (39) STR 754 (Bom.) 42 C/51937/2021 & 1713 others clarificatory. However, merely using the said words would not be sufficient to conclusively hold that the Act is declaratory. Even by use of such words, a statute may introduce new rules of law and that in such case, it would amount to substantial change in the law and will not be necessarily retrospective. It has been held that for determining the nature of the Act regard must be had to the substance rather than the form. It has been held that if a new Act is to explain an earlier Act, it would be without object unless construed retrospectively. It has been further held that an explanatory Act is generally passed to supply an omission or to clear up doubts as to meaning of previous Act. However, in the absence of clear words indicating that the meaning of the Act is declaratory, it would not be so construed when the pre- amended provision was clear and unambiguous."
(emphasis supplied)
44. The Delhi High Court in Commissioner of Income Tax, New Delhi vs. Rajasthan Mercantile Co. Ltd.29 examined whether the amendments carried out in Explanation 2 to section 37(2A) of the Income Tax Act, 1961 could be considered as declaratory and be given retrospective effect and observed that an 'explanation' is usually issued to clarify or resolve any ambiguity and mere use of the word 'explanation' cannot be the determining factor to ascertain the proper meaning and scope of the provision. The Delhi High Court further observed that if an explanation alters or widens the scope of the main provision, it cannot be applied to past periods when the explanation was not in force. The relevant portions of the judgment of the Delhi High Court are reproduced below :
"22. Mr. Gupta, for the Revenue tried to lead us on a different path. According to the learned counsel.
29. (1995) 211 ITR 400 43 C/51937/2021 & 1713 others Explanation 2, is clarificatory in nature, declaratory in character, and explanatory in substance; therefore, it is not affected by any rule against retrospectivity; the Explanation brings into force the real meaning of the term "entertainment expenditure" and, therefore, should be read as if it was there all along. The learned counsel took us through a few decisions on this aspect:
Commissioner of Income-tax v. India Steamship Co. Ltd., [(1992) 196 ITR 917] is a decision of the Calcutta High Court. ***** The Court held that the retrospectivity need not be confined to the period after 1-4- 1974, because, the Explanation was clarificatory in nature, intended to clear up any doubt or ambiguity as to the true meaning of the relevant provision. Therefore, this meaning was held as the true meaning governing the provision for the assessment year 1972-73 also. At page 935 the Court held:
***** It is no doubt true that, ordinarily, a statute, and particularly when the same has been made applicable with effect from a particular date should be construed prospectively and not retrospectively. But this principle will not be applicable in a case where the provision construed is merely explanatory, clarificatory or declaratory. It cannot be disputed that the object of the Explanation is to explain the meaning and intendment of the Act itself."
*****
29. In the instant case, the Explanation 2 in question, actually purports to be a provision defining the concept of entertainment expenditure, by including a few kinds of expenditures within its scope. Only because a provision attached to a section bears the nomenclature, as 'Explanation', it cannot always be considered as conveying the true and natural meaning of the words or the provisions of the Act. The meaning attributable to the relevant provisions of the Act without the 44 C/51937/2021 & 1713 others Explanations shall have to be considered first, to find out whether, it created an artificial situation, or created ambiguity, and if so, the Explanation may be considered as having injected the true and real meaning to those provisions from the very inception of the provisions to which the Explanation is added."
(emphasis supplied)
45. What follows from the aforesaid judgments of the Supreme Court and the High Courts is that an Explanation to a provision may either clear the ambiguity in the main provision or it may add and widen the scope of the main provision. A provision is said to be clarificatory if a consideration of the meaning of the provision to which the Explanation has been added when compared to the meaning given by the added Explanation remains the same. However, if the meaning changes, it cannot be said to be clarificatory in nature. If the Explanation is clarificatory in nature, it may be given retrospective operation, but if it changes the law and alters or widens the scope of the main provision, it cannot be given retrospective operation.
46. In the present case, though Explanation (d), inserted by the Amendment Notification dated 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 45 C/51937/2021 & 1713 others 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.
48. Learned authorized representative appearing for the department, however, placed emphasis on the use of the word 'substituted' in clause (i) of the Amendment Notification dated 19.07.2021 and submitted that this would mean that it should be given retrospective effect. To substantiate this submission, learned authorized representative placed reliance upon the decision of the Supreme Court Indian Tobacco Association.
49. It is not possible to accept this submission advanced by the learned authorized representative appearing for the department. In the main body of the Amendment Notification dated 19.07.2021, it has been specifically stated that 'in exercise of the powers conferred by section 25(1) of the Customs Act, the Government makes the following amendments in the Notification of the Government of India'. The judgment of the Supreme Court in Indian Tobacco Association also does not lay down that in all 46 C/51937/2021 & 1713 others cases where amendment has been carried out by way of "substitution", the substantive provision will have a retrospective effect. This is clear from paragraph 26 of the judgment, which is reproduced below :
"26. We are not oblivious of the fact that in certain situations, the Court having regard to the purport and object sought to be achieved by the legislature may construe the word "substitution" as an "amendment"
having a prospective effect but such a question does not arise in the instant case."
50. It also needs to be noted that in paragraph 16 of the aforesaid judgment in Indian Tobacco Association, the Supreme Court observed that the amendment under consideration does not take away any substantive right nor any penal consequence has been imposed. The Supreme Court also made it clear that the amendment only removes an obvious mistake. In fact, relying upon the doctrine of fairness, the Supreme Court observed :
"28. The doctrine of fairness also is now considered to be a relevant factor for construing a statute. In a case of this nature where the effect of a beneficent statute was sought to be extended keeping in view the fact that the benefit was already availed of by the agriculturalists of tobacco in Guntur, it would be highly unfair if the benefit granted to them is taken away, although the same was meant to be extended to them also. For such purposes the statute need not be given retrospective effect by express words but the intent and object of the legislature in relation thereto can be culled out from the background facts.
29. The question has furthermore to be considered having regard to the language and object discernible from the statute read as a whole. The Respondents were not ineligible from obtaining the benefit. Once they are held to be eligible for obtaining the 47 C/51937/2021 & 1713 others benefit, the amended notification being an exemption notification should receive the beneficent construction.
30. It is not a case where the Respondents, like the cases of Mahaan Dairies (supra) and Tata Iron & Steel Co. Ltd. (supra) were ineligible from claiming the benefit. The subsequent notification, thus, should receive a beneficent construction."
(emphasis supplied)
51. Reliance placed by the learned authorized representative of the department on the decision of the Tribunal in OM Fragrances is misplaced. In paragraph 22 of the decision, the Tribunal observed that since no substantive right had been taken away nor any penal consequences had been imposed and only an obvious mistake was sought to be removed, the amendment would be retrospective in nature. The relevant paragraph 22 of the decision of the Tribunal in OM Fragrances is reproduced below :
"22. These decisions would not help the appellant as they deal with amendment by substitution. In any case, the Supreme Court also made it clear that in such a situation the amendment would be retrospective since no substantive right had been taken away nor any penal consequences had been imposed and only an obvious mistake was sought to be removed. In the present case, if the contention of learned authorized representative appearing for the department is accepted, the respondent would be subjected to higher rate of duty than what was prevailing at that time the search was conducted."
52. In the present case, as noticed above, the Amendment Notification creates a new liability in the form of integrated tax to be borne by the appellant. It is not an amendment which confers a benefit upon the appellant.
48
C/51937/2021 & 1713 others
53. Learned authorized representative appearing for the department, however, made an attempt to submit that since the amendment was made in the Exemption Notification, it must be treated that the Explanation was a beneficial piece of legislation for the assessee.
54. This submission has been stated to be merely rejected. It is difficult to conceive how the amendment that seeks to levy integrated tax on an assessee, which otherwise was not leviable prior to the amendment, can be considered to be a beneficial piece of legislation for the assessee.
55. Though it is correct that for the period upto 30.06.2017, the Exemption Notification No. 94/96 dated 16.12.1996 levied basic customs duty and countervailing duty and the Amendment Notification dated 19.07.2017 levied both basic customs duty and integrated tax, but it is equally true that Exemption Notification dated 30.06.2017, which operated from 01.07.2017 to 18.07.2021, merely levied duty of customs and did not levy integrated tax. It is not possible to accept the contention of the learned authorized representative of the department that the Exemption Notification for the intervening period, therefore, should be interpreted in such a manner so as to included integrated tax in the duty of customs. The text and language employed in the Notification has to be seen and in the instant case Notification dated 30.06.2017 is very clear and was also interpreted by the Tribunal in InterGlobe Aviation to mean that integrated tax would not be included in the duty of customs.
56. In the end, learned authorized representative appearing for the department referred to the 37th and 39th meeting of the GST Council as also the Circular dated 19.07.2021 issued by the CBIC and the 43 rd 49 C/51937/2021 & 1713 others meeting of the GST Council to contend that the Amendment Notification dated 19.07.2021 should be construed retrospectively.
57. The Circular dated 19.07.2021 was issued on the same date the Amendment Notification dated 19.07.2021 was issued. This Circular refers to 14th, 37th and 39th meeting of the GST Council and mentions that the Council had recommended for levy of integrated tax and cess on the repair, insurance and freight cost instead of the entire value of the goods on the basis of which the Exemption Notification dated 30.06.2017 was issued but the Tribunal in InterGlobe Aviation decided that 'duty of customs' would not include integrated tax. The Circular also notes that the GST Council in its 43rd Meeting 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 repairs attracts integrated tax and cess on the value equal to the repair value, insurance and freight and the Amendment Notification dated 19.07.2017 had been issued to give effect to the decision of the GST Council.
58. The contention of learned counsel for the appellant is that retrospectivity to the Amendment Notification dated 19.07.2021 is neither borne out from the meeting of the aforesaid GST Council or the Circular dated 19.07.2021 and in any case intendment has not be considered while examining the text of a notification.
59. The contention advanced by the learned counsel for the appellant deserves to be accepted. There can be no doubts that while interpreting an Exemption Notification, it is the text and the language employed in the Notification that is relevant and the intention of the Government or the 50 C/51937/2021 & 1713 others authority issuing the Notification would, therefore, not be significant. The Exemption Notification dated 30.06.2017 had been examined by the Tribunal in the decision rendered on 02.11.2020 in InterGlobe Aviation and it was categorically held, on a consideration of the provisions of the Customs Act, Tariff Act and the text of the Exemption Notification dated 30.06.2017, that 'duty of customs' would not include integrated tax.
60. In this connection reference can be made to the Constitution Bench judgment of the Supreme Court in Hemraj Gordhandas wherein it was observed that in a taxing statue there is no room for intendment and what has to be seen is the clear meaning of the words. The relevant observation of the Supreme Court are reproduced below:
"5 ***** It is well established that in a taxing statute there is no room for any intendment but regard must be had to the clear meaning of the words. The entire matter is governed wholly by the language of the notification. If the tax-payer is within the plain terms of the exemption it cannot be denied its benefit by calling in aid any supposed intention of the exempting authority. If such intention can be gathered from the construction of the words of the notification or by necessary implication therefrom, the matter is different but that is not the case here. In this connection we may refer to the observations of Lord Watson in Salomon v. Salomon and Co., 1897 AC 22 at p. 38:
"Intention of the legislature is a common but very slippery phrase, which, popularly understood may signify anything from intention embodied in positive enactment to speculative opinion as to what the legislature probably would have meant although there has been an omission to enact it. In a Court of Law or Equity, what the Legislature intended to be done or not to be done can only be legitimately ascertained from that which it has chosen to enact, either in express 51 C/51937/2021 & 1713 others words or by reasonable and necessary implication."
It is an application of this principle that a statutory notification may not be extended so as to meet a casus omissus. As appears in the judgment of the Privy Council in Crawford v. Spooner, (1846) 6 Moo PC 1(9):
"***** we cannot aid the legislature's defective phrasing of the Act, we cannot add, and mend, and, by construction, make up deficiencies which are left there." Learned Counsel for the respondents is possibly right in his submission that the object behind the two notifications is to encourage the actual manufacturers of handloom cloth to switch over to power-looms by constituting themselves into co-operative societies. But the operation of the notification has to be judged not by the object which the rule-making authority had in mind but by the words which it has employed to effectuate the legislative intent. Applying this principle we are of opinion that the case of the appellant is covered by the language of the two notifications dated July 31, 1959 and April 30, 1960 and appellant is entitled to exemption from excise duty for the cotton fabrics produced for the period between October 1, 1959 to April 30, 1960 and from May 1, 1960 to January 3, 1961. It follows therefore that the appellant is entitled to the grant of a writ in the nature of certiorari to quash the order of the Assistant Collector of Central Excise of Baroda dated November 26, 1962 and the appellate order of the Collector of Central Excise dated November 12, 1963."
(emphasis supplied)
61. This proposition was reiterated by the Constitution Bench of the Supreme Court in Commissioner of Customs (Import), Mumbai vs. Dilip Kumar & Company30 and the relevant portions of the judgment are reproduced below:
"25.........Indeed, it is well-settled that in a taxation statute, there is no room for any intendment; that
30. 2018 (361) ELT 577 (SC) 52 C/51937/2021 & 1713 others regard must be had to the clear meaning of the words and that the matter should be governed wholly by the language of the notification. Equity has no place in interpretation of a tax statute. Strictly one has to look to the language used; there is no room for searching intendment nor drawing any presumption. Furthermore, nothing has to be read into nor should anything be implied other than essential inferences while considering a taxation statute.
*****
34. In Hansraj Gordhandas v. H.H. Dave, Asst. Collector of Central Excise & Customs, Surat and Ors., AIR 1970 SC 755 = (1969) 2 SCR 253 = 1978 (2) E.L.T. J350 (S.C.) [hereinafter referred as Hansraj Gordhandas case' for brevity], wherein this Court was called upon to interpret an exemption notification issued under the Central Excise Act ***** The Court did not countenance such purposive interpretation. It was held that a taxing legislation should be interpreted wholly by the language of the notification ***** *****
44. In Hansraj Gordhandas case (supra), the Constitutional Bench unanimously pointed out that an exemption from taxation is to be allowed based wholly by the language of the notification and exemption cannot be gathered by necessary implication or by construction of words; in other words, one has to look to the language alone and the object and purpose for granting exemption is irrelevant and immaterial."
(emphasis supplied)
62. In Income Tax Officer, District II(ii), Kanpur & Ors. vs. Mani Ram Etc.31, the Supreme Court quoted the observations made by Lord Radcliffe and the relevant portion is reproduced below:
31. (1969) 72 ITR 203 53 C/51937/2021 & 1713 others "7 ***** In in re Mac Manasway and again by my noble and learned friend Lord Radcliffe in Inland Revenue Commissioners v. Dowdall, O'Mahoney & Co. Ltd. that the beliefs or assumptions of those who frame Acts of Parliament cannot make the law."
(emphasis supplied)
63. Learned counsel for the appellant, however, also pointed out that where integrated tax was to be levied, it was specifically mentioned in the Notification. In this connection, learned counsel for the appellant referred to serial number 1 of the Exemption Notification dated 30.06.2017 which had also been noticed by the Tribunal in the decision rendered on 02.11.2021 in InterGlobe Aviation.
64. The submission advanced by the learned counsel also deserves to be accepted. In paragraph 45 of the decision of the Tribunal in InterGlobe Aviation, the following observations were made by the Tribunal :
"45. In this connection it would also be relevant to refer to the entries at serial no. 1 of the Exemption Notification. Serial no. 1 specifically refers to what types of duties or taxes are leviable under different situations. There is a specific reference to integrated tax in column (3) in connection with serial no. 1 (d) and to integrated tax and compensation cess in connection with serial no. 1(e). There is, therefore, enough intrinsic evidence in the Exemption Notification itself to show that integrated tax cannot be understood as duty of customs in the Exemption Notification."
(emphasis supplied)
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 54 C/51937/2021 & 1713 others 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.
(Order pronounced on 05.08.2024) (JUSTICE DILIP GUPTA) PRESIDENT (P.V. SUBBA RAO) MEMBER (TECHNICAL) Golay, Shreya, Jyoti