2011 (3) TMI 195 - HC - Customs

Refund/input tax credit - Notification No. 102/2007-Customs dated 14.9.2007 - whether the circular dated 14.9.2007 is treated as retrospective or prospective - it is clear as crystal the Central Government in supersession of the notification of the Government of India, Ministry of Finance, Department of Revenue No.19/2005-Customs dated 1.3.2005 directed that all goods specified under the Chapter, heading, sub-hearing or tariff item of the First Schedule to the said Act, having regard to the sales tax, value added tax, local tax and other taxes or charges leviable on sale or purchase or transportation of like goods in India, when imported into India, shall be liable to an additional duty of customs at the rate of four per cent ad valorem - circular dated 14.9.2007 is prospective in nature - in the absence of anything being there in the earlier notification or any prevalent practice or any recognition, it is difficult to construe that what was implied earlier had become express by the later circular or it had become incumbent or necessitous to issue a circular - Decided in the favour of the assessee

Summary

Issues:
- Whether the petitioner is entitled to take refund/input tax credit on additional custom duty imposed under Notification No.19/2006-CUS dated 1.3.2006.
- Whether the circular dated 14.9.2007 is retrospective or prospective.

Analysis:
1. The petitioner sought a writ of mandamus to allow refund/input tax credit on additional custom duty imposed under Notification No.19/2006-CUS dated 1.3.2006. The petitioner is a registered dealer engaged in trading of paper, paperboard, and lamination film. The Central Government imposed additional duty of customs (CVD) to countervail State taxes/VAT through the said notification. The petitioner argued that the circular dated 14.9.2007 clarified the notification and should have retrospective effect from 1.3.2006, citing W.P.I.L. Ltd. v. Commissioner of Central Excise, Meerut, UP, 2005 (181) ELT 359 (SC) to support the retroactive interpretation.

2. The main issue revolved around the retrospective or prospective nature of the circular dated 14.9.2007. The court referred to the principle that in the absence of express words indicating retrospectivity, a notification takes effect from the date of issuance. The judgment cited Sri Vijayalakshmi Rice Mills, New Contractors Co. & Ors. v. State of Andhra Pradesh, AIR 1976 SC 1471 to emphasize this principle. The court also referenced Collector of Central Excise v. Wood Craft Products Ltd., (1995) 3 SCC 454 to highlight the importance of explicit language in notifications.

3. The court analyzed the language of the circular dated 14.9.2007 and the subsequent circular of 28.4.2008 regarding the refund scheme for the additional duty of customs. It was observed that the circular dated 14.9.2007 was prospective in nature, focusing on exemption rather than imposition of taxes. The court rejected the argument that the circular should be treated as retrospective, as there was no indication in the earlier notification or prevalent practice to support such an interpretation.

4. Ultimately, the court found no merit in the writ petition and dismissed it without any order as to costs. The judgment emphasized the importance of explicit language in notifications and the distinction between imposition and exemption in tax matters. The decision was based on the specific language and context of the notifications involved in the case.

By analyzing the issues raised and the court's detailed reasoning, it is evident that the judgment focused on the interpretation of notifications and the application of legal principles to determine the retrospective or prospective nature of the circular in question.