2024 (10) TMI 986 - AT - Customs

Retrospective effect of Notification dated 26.12.2013 issued subsequent to the date of import of the goods - effect of amendment in the Notification dated 26.12.2013 - phrase 113 Kameng Hydro Electrical Power Project, Arunachal Pradesh- 600 MW (North Eastern Electric Power Corporation Ltd.) (NEEPCO) was inserted - HELD THAT - The department has appreciated the fact that the appellant s power project was duly approved by the Joint Secretary in the Ministry of Power, Government of India and the benefit of duty exemption provided under the Notification dated 17.03.2012 is available. Since, the Notification dated 17.03.2012 was amended vide Notification dated 26.12.2013, the same should be considered as curative in nature inasmuch as the specific power project in the North East belonging to NEEPCO was inserted for providing the duty exemption contained therein. Since, the date of effect of the notification dated 26.12.2013 was not specifically provided, it has to be construed that to cure the defect of non-incorporation of the particular power project, which was subsequently done vide notification dated 26.12.2013 should be considered as retrospective in operation and the goods imported by the appellants for installation in the approved power project should be available for the benefit of exemption provided therein. The Hon ble Supreme Court in the case of WPIL. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, MEERUT, UP. 2005 (2) TMI 137 - SUPREME COURT has clarified that clarificatory notification merely clarifies the position and makes explicit what was implicit and in such case, the notification should be considered as retrospective in operation. Further, in the case of M/S. RALSON (INDIA) LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, CHANDIGARH-I 2015 (4) TMI 74 - SUPREME COURT , the Hon ble Supreme Court have held that when the Government rectifies an inadvertent error by way of issuance of the notification, then the same should be treated as corrective/clarificatory and will have retrospective effect. Thus, the benefit provided under Notification dated 26.12.2013 should be available to them and accordingly, the application filed by the appellants for re-assessment of B/E should be considered by the department by extending the benefit provided under Notification dated 26.12.2013 - the impugned order is set aside - appeal allowed.

Summary

Issues:
Interpretation of retrospective effect of a customs duty exemption notification.

Analysis:
The case involved the appellants engaged in the fabrication and erection of hydro mechanical equipment for a power project. They imported capital goods for a project under a specific contract with a power corporation. The dispute arose when the appellants claimed a customs duty exemption under Notification No. 12/2012-Customs, which was later amended by Notification No. 53/2013-Customs. The department rejected the claim, stating that the amendment did not have retrospective effect. The appellants appealed to the Tribunal challenging this decision.

Upon examination, the Tribunal noted that the power project of the appellants was duly approved, making them eligible for the duty exemption under the original notification. The Tribunal interpreted the amendment as curative in nature, aimed at rectifying the omission of the specific power project in the original notification. Citing legal precedents, including the Supreme Court's decision in W.P.I.L. Ltd. Vs. Commissioner of Central Excise, the Tribunal emphasized that clarificatory notifications should be considered retrospective in operation. Additionally, the Tribunal referred to the case of Ralson (India) Ltd. Vs. Commissioner of C. Ex., Chandigarh-I, where the Supreme Court held that rectifying inadvertent errors through notifications should be treated as corrective and clarificatory, with retrospective effect.

Based on the legal principles and precedents, the Tribunal concluded that the appellants were entitled to the benefit of the amended notification. The Tribunal set aside the department's decision, allowing the appeal in favor of the appellants. The judgment highlighted the importance of interpreting customs duty exemption notifications in a manner that upholds the intent of rectifying errors and ensuring that eligible parties receive the intended benefits.

In summary, the Tribunal's decision focused on the retrospective applicability of customs duty exemption notifications, emphasizing the need to consider clarificatory amendments as having retrospective effect to rectify omissions and errors in the original notifications. The judgment underscored the legal principle that notifications aimed at correcting inadvertent errors should be interpreted as corrective and clarificatory, with retrospective application to ensure fairness and uphold the intended benefits for eligible parties.