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2016 (8) TMI 831 - HC - CustomsClassification - export of marine products - fish shrimps, prawns, cuttlefish etc., - Held that - the goods in question are not fish to attract the levy of cess as provided in the Agricultural Produce Cess Act, 1940. No reason found to deviate from the principles laid down therein. Refund of cess paid - cess levied under section 3 of the Agricultural Produce Cess Act, 1940 - Held that - the Cess Act was repealed by the legislature with effect from 25.9.2006. If that be so, cess under the Act could not have been levied on any export that was effected subsequent thereto. The levy of tax for the period thereafter is, therefore, clearly ultra vires order of Tribunal not interfered appeal dismissed decided against appellant.
Issues Involved:
1. Whether marine products such as shrimps, prawns, cuttlefish, octopus, molluscs, etc., can be classified as "fish" under the Agricultural Produce Cess Act, 1940. 2. The legality of levying cess under the Agricultural Produce Cess Act, 1940, post its repeal by the Cess Laws (Repealing and Amending) Act, 2006. Issue-wise Detailed Analysis: 1. Classification of Marine Products as "Fish": The primary issue was whether marine products like shrimps, prawns, cuttlefish, octopus, and molluscs could be classified as "fish" under the Agricultural Produce Cess Act, 1940, thereby attracting cess. The respondents, exporters of these marine products, were initially levied cess treating these items as "fish." They contested this classification and sought refunds, which were initially rejected but later allowed by the Commissioner of Customs (Appeals) and upheld by the Tribunal. The Tribunal's decision was influenced by the judgment of the Division Bench of Madras High Court in Commissioner of Customs, Tuticorin v. Edhayam Frozen Foods, which held that "fish" does not include molluscs and crustaceans such as prawns and shrimps. The judgment emphasized that if the legislature intended to include all aquatic animals or marine products under "fish," it would have explicitly stated so. The Madras High Court referred to several principles of statutory interpretation, emphasizing that no words in a statute should be considered redundant or superfluous. The court highlighted that the term "fish" in the common or commercial understanding does not include prawns and shrimps. Dictionaries and expert opinions further supported this distinction, noting that "fish" are vertebrates, while prawns and shrimps are invertebrates (crustaceans). The court also referred to other enactments like the Marine Products Export Development Authority Act, 1972, and the Customs Tariff Act, 1975, where "fish" and "prawns/shrimps" were classified separately, reinforcing the commercial and biological distinction between these categories. 2. Levy of Cess Post-Repeal of the Act: The second issue was the legality of levying cess under the Agricultural Produce Cess Act, 1940, after its repeal by the Cess Laws (Repealing and Amending) Act, 2006, effective from 25.09.2006. Despite the repeal, cess continued to be levied on the respondents' exports, leading to further refund claims. The court unequivocally stated that post-repeal, the levy of cess under the Act was ultra vires. The Commissioner (Appeals) was justified in allowing the refund claims for the period subsequent to the repeal, and the Tribunal was correct in upholding these orders. The court affirmed that any cess levied after the repeal of the Act was illegal and could not be sustained. Conclusion: The High Court upheld the Tribunal's findings that the marine products in question are not classified as "fish" under the Agricultural Produce Cess Act, 1940, and thus do not attract cess. Additionally, it confirmed that the levy of cess post-repeal of the Act was ultra vires. Consequently, the appeals by the Commissioner of Customs were dismissed.
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