2017 (12) TMI 462 - HC - Customs

Exemption from customs and excise duty - continuation of exemption under GST regime - continuation of exemption until the validity of registration granted to the petitioner s R&D centre - Held that - This Court is prima facie of the view that an exemption cannot be claimed as a matter of right in terms of the judgment of the Supreme Court in Union of India v. Parameswaran Match Works 1974 (11) TMI 40 - SUPREME COURT OF INDIA . The petitioner claims to be a Non-commercial Research Institution recognized by the Department of Scientific and Industrial Research, Ministry of Science & Technology. Imports by Non-commercial Research Institutions are completely exempt from payment of customs duty as also payment of Integrated tax which is clear from a reading of N/N. 27/2017- Customs dated 30th June, 2017 - However, insofar as local purchases made by Non-commercial Research Institutions are concerned, the exemption from payment of excise duty, stands rescinded vide N/N. 9/2017- Central Excise dated 30th June, 2017. The matter requires elucidation and the Government should respond as to the basis of the said rescission to Non-commercial Research Institutions. The matter requires elucidation - The Court is of the opinion that notice should be issued to the respondents.

Summary

Issues:
1. Claim of vested right for exemption from customs and excise duty until a specified date.
2. Interpretation of exemption claims by Non-commercial Research Institutions.
3. Validity of rescission of excise duty exemption for local purchases by Non-commercial Research Institutions.

Analysis:

1. The petitioner argued for a vested right to continue exemption from customs and excise duty until the validity of registration for its R&D center, citing a judgment by the Supreme Court. The court acknowledged the argument but noted that exemption cannot be claimed as an absolute right based on the cited precedent.

2. The court highlighted that Non-commercial Research Institutions, like the petitioner, enjoy exemptions from customs duty and integrated tax for imports as per Notification No.27/2017-Customs. However, the exemption from excise duty for local purchases by such institutions was rescinded under Notification No.9/2017-Central Excise. The court deemed it necessary for the Government to clarify the basis for this rescission to Non-commercial Research Institutions.

3. Considering the above, the court decided to issue notice to the respondents for further examination of the matter. The respondents were directed to file a counter affidavit within six weeks, with the petitioner given four weeks to file a rejoinder affidavit post the service of the counter affidavit. The case was scheduled for listing on 22nd January, 2018, indicating the court's intention to delve deeper into the issues raised regarding the exemption claims and the rescission of excise duty for Non-commercial Research Institutions.