2025 (2) TMI 320 - AT - Customs

Effect of N/N. 36/2021-Customs dated 19.07.2021 the Amendment Notification issued u/s 25(1) of the Customs Act 1962 amending N/N. 45/2017-Customs dated 30.06.2017 - retrospective effect from the date the Exemption Notification was issued on 30.06.2017 or not - HELD THAT - The main body of the Amendment Notification mentions that the Central Government hereby makes the following amendments in the Exemption Notification dated 30.06.2017. It does not state that the amendment would apply retrospectively from the date the Exemption Notification was issued on 30.06.2017 nor does Explanation (d) state that it has been inserted with retrospective effect. Section 25(4) of the Customs Act provides that every notification issued under sub-section (1) shall unless otherwise provided come into force on the date of its issue by the Central Government for publication in the Official Gazette. In the absence of any specific stipulation in the Amendment Notification providing otherwise the said Amendment Notification shall come into force on the date of its issue by the Central Government i.e. 19.07.2021. The Amendment Notification dated 19.07.2021 cannot therefore have retrospective effect. The issues that have been raised in these appeals were also raised before the Division Bench of this Tribunal in InterGlobe Aviation Limited vs. Commissioner of Customs New Delhi 2024 (8) TMI 1523 - CESTAT NEW DELHI and it was held that the Amendment Notification dated 19.07.2021 cannot have a retrospective effect. Conclusion - The Amendment Notification dated 19.07.2021 cannot be said to be retrospective in nature. Findings to the contrary recorded by the Commissioner (Appeals) in the impugned orders on the basis of the Circular dated 19.07.2021 issued by CBIC basis the minutes of the meeting of the GST Council cannot therefore be sustained. The impugned order set aside - appeal allowed.

Summary

The core issue considered in these appeals was whether the Amendment Notification No. 36/2021-Customs, dated 19.07.2021, issued under section 25(1) of the Customs Act, 1962, amending Notification No. 45/2017-Customs dated 30.06.2017, has retrospective effect from the date the Exemption Notification was issued on 30.06.2017.

The legal framework involved includes section 25(1) of the Customs Act, which empowers the Central Government to grant exemptions from customs duties. The Exemption Notification dated 30.06.2017 exempted certain goods from customs duties and integrated tax upon re-importation after repairs. The Tribunal's prior decision in InterGlobe Aviation Ltd. vs. Commissioner of Customs clarified that "duty of customs" in the Notification did not include integrated tax, leading to the issuance of the Amendment Notification in 2021 to address this interpretation.

The Court's reasoning focused on whether the Amendment Notification could be considered clarificatory and thus retrospective. The Tribunal analyzed the language of the Amendment Notification, which did not explicitly state it was retrospective. Section 25(4) of the Customs Act specifies that a notification comes into force on its issue date unless stated otherwise. The Tribunal found no such retrospective stipulation in the Amendment Notification.

Key evidence included the Tribunal's previous decision in InterGlobe Aviation, which interpreted the original Exemption Notification as not including integrated tax in "duty of customs." The Amendment Notification introduced the phrase "Said duty, tax or cess," suggesting a substantive change rather than a clarification.

The Tribunal applied the law to the facts by comparing the pre-amendment and post-amendment scenarios. It concluded that the Amendment Notification imposed a new liability for integrated tax, which was not present before, indicating a substantive change rather than a clarificatory one.

Competing arguments included the appellant's claim that the Amendment Notification was substantive and not retrospective, while the respondent argued it was clarificatory and thus retrospective. The Tribunal sided with the appellant, emphasizing the absence of explicit retrospective language in the Amendment Notification.

Significant holdings included the Tribunal's determination that the Amendment Notification could not be applied retrospectively. The Tribunal emphasized that a provision cannot be deemed clarificatory merely because it uses terms like "for removal of doubts" if it introduces new liabilities. The Tribunal's final determination was that the Amendment Notification dated 19.07.2021 is not retrospective, setting aside the impugned orders and allowing all appeals.