9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (9) TMI 360 - SC - CustomsRefund of SAD - goods imported from Nepal - Notification No. 124/2000 amending the earlier Notification No. 37/96 and enlarging the scope of exemption from basic customs duty by including SAD - retrospective effect of amendment - exemption from customs, excise duty and also SAD - rates of SAD rectified - Held that - The exemption which was granted by notification dated 29th September, 2000 was, therefore, in the nature of specific and new exemption from payment of special additional duty, which was otherwise payable in view of the introduction of Section 3A to the Tariff Act. It is difficult to appreciate that the exemption granted vide notification dated 20th September, 2000 to special additional duty was clarificatory or to give effect to the existing protocol. We think so as protocol appended to the Treaty could not have conceived of future levy by way of proposition. In any case, factually it does not. Therefore, the notification of 20th September, 2000 conferred a new benefit which was not earlier stipulated or the subject matter of protocol. The reliance on the decision of the case Ralson India Limited v. Commissioner of Central Excise, Chandigarh 2015 (4) TMI 74 - SUPREME COURT do not asset the case of assessee. It cannot be also said the issue of notification was a formal ministerial act which got delayed for administrative reasons. It was a conscious act and a deliberate decision which came into existence after due deliberation when it was decided to grant exemption under Section 3A of the Tariff Act. Appeal dismissed - decided against appellant.
Issues Involved:
1. Treaty of Trade between India and Nepal and its implications. 2. Notification No. 37/1996 and its scope. 3. Introduction of Section 3A in the Tariff Act and its impact. 4. Notification No. 124/2000 and its retrospective applicability. 5. Levy of Special Additional Duty (SAD) and its exemption. Detailed Analysis: 1. Treaty of Trade between India and Nepal and its implications: The Treaty of Trade signed between India and Nepal in July 1996 aimed to fortify traditional connections and strengthen economic cooperation. Article III of the Treaty mandated that both contracting parties accord treatment no less favorable than that accorded to any third country regarding customs duties and import regulations. Article IV provided for reciprocal exemption from basic customs duty and quantitative restrictions for mutually agreed primary products. Article V, a non-reciprocal provision, aimed to promote Nepal's industrial development by granting favorable treatment to imports of Nepalese industrial products into India concerning customs duty and quantitative restrictions. 2. Notification No. 37/1996 and its scope: Following the Treaty, the Indian Government issued Notification No. 37/1996, exempting specified goods imported from Nepal from the whole of the customs duty under the First Schedule to the Customs Tariff Act, 1975. The appellant, importing dental hygiene products from Nepal, availed of this exemption. 3. Introduction of Section 3A in the Tariff Act and its impact: In 1998, Section 3A was introduced in the Tariff Act, imposing a Special Additional Duty (SAD) on imported articles, calculated based on the maximum sales tax, local tax, or other charges levied on similar articles sold in India. Following this, Notification No. 18/2000-Customs prescribed the rates for SAD, leading to the appellant being asked to pay SAD, which they did under protest. 4. Notification No. 124/2000 and its retrospective applicability: Notification No. 124/2000, issued on 29.09.2000, amended Notification No. 37/1996 to include an exemption from SAD. The appellant sought a refund of SAD paid between 01.03.2000 and 29.09.2000, arguing that the amendment should be considered retrospective, as the Treaty did not envisage SAD. The tribunal, however, held that the notification was not retrospective. The Member (Judicial) opined that the Treaty provided a framework, but actual import and export were governed by Customs and Central Excise statutes, and the judiciary could not fill the gap left by the Government. The Member (Technical) dissented, suggesting that the notification was a belated response to the Treaty and should be retrospective. The third Member, agreeing with the Member (Judicial), held that the notifications were independent and applicable from their respective dates of issue. 5. Levy of Special Additional Duty (SAD) and its exemption: The Supreme Court analyzed the Treaty, the protocol, and the notifications. It noted that the Treaty and the protocol distinguished between basic customs duty and additional duty but did not cover SAD, introduced later in 1998. The exemption granted by Notification No. 124/2000 was specific to SAD and was not clarificatory of the earlier exemption. The Court held that the notification was prospective and not retrospective, as the Treaty could not have anticipated future levies like SAD. The Court dismissed the appeals, stating that the exemption from SAD was a new benefit and not a clarification of the existing protocol. Conclusion: The Supreme Court concluded that the exemption from SAD granted by Notification No. 124/2000 was prospective and not retrospective. The Treaty of Trade and its protocol did not cover SAD, which was introduced later. The notifications were independent, and the exemption from SAD was a new benefit, not a clarification of the earlier exemption. The appeals were dismissed without any order as to costs.
|
