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TMI Blog2016 (9) TMI 360X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. - Civil Appeal No. 8593 of 2003, Civil Appeal No. 8309 of 2016 (@ SLP (C) No. 11487 of 2006) - - - Dated:- 24-8-2016 - Dipak Misra And Prafulla C. Pant, JJ. For the Appellant : Mr. S. Ganesh, Sr. Adv. Mr. Ajay Aggarwal, Adv. Ms. Mallika Joshi, Adv. Ms. Ruchika, Adv. Mr. Rajan Narain,Adv. Mr. Prateek Rusia, Adv. Mr. Gaurav Agrawal,Adv For the Respondent : Mr. A.K. Panda, Sr. Adv. Ms. Nisha Bagchi, Adv. Mr. Arijit Prasad, Adv. Ms. Ruksana Chowdhary, Adv. Ms. Pooja Sharma, Adv. Mr. B. Krishna Prasad,Adv JUDGMENT Dipak Misra, J. Leave granted in S.L.P. (Civil) No. 11487 of 2006. 2. Keeping in view the need to f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iff. 4. The Additional Duty rates equal to the effective Indian Excise duty rates applicable to similar Indian Products under the Indian Customs Central Excise Tariff will continue to be levied on the imports into India of products manufactured in the medium and large scale units in Nepal. 4(i) In regard to additional duty collected by the Government of India in respect of manufactured articles other than those manufactured in small units: Wherever it is established that the cost of production of an articles is higher in Nepal than the cost of production in a corresponding unit in India, a sum representing such difference in the cost of production, but not exceeding 25 percent of the additional duty collected by the Government of India, will be paid of His Majesty s Government of Nepal provided. His Majesty s Government of Nepal have given assistance to the same extent to the (manufacturers) exporters . 4. Pursuant to the aforesaid Treaty, the Government of India issued a Notification No. 37 of 1996 dated 23.7.1996, in exercise of powers under Section 25 of the Customs Act, 1962 (for short, the Customs Act ) whereby specified goods in the notification wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... troduced in 1998 provides for imposition of special additional duty. The relevant portion of the said Section reads as follows:- 3A. Special additional duty. (1) Any article which is imported into India shall in addition be liable to a duty (hereinafter referred to in this section as the special additional duty), which shall be levied at a rate to be specified by the Central Government, by notification in the Official Gazette, having regard to the maximum sales tax, local tax or any other charges for the time being leviable on a like article on its sale or purchase in India: Provided that until such rate is specified by the Central Government, the special additional duty shall be levied and collected at the rate of eight percent of the value of the article imported into India. 8. After the said provision came into force, Notification No. 18/2000-Customs was issued on 1st March, 2000. By the said notification the Central Government prescribed the rates of special duty. Relevant part of the notification is reproduced below:- Notification No.18/2000-Customs In exercise of the powers conferred by sub-section (1) of section 3A of the Customs Tariff Act, 197 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .01.2001 for refund of Special Additional Duty (SAD) paid in respect of the imports made from Nepal during the period 01.03.2000 to 29.09.2000. The authority concerned rejected the said application preferred by the appellant. Eventually, the matter came up in appeal being Appeal No.C-216/02 before the Customs, Excise Gold (Control) Appellate Tribunal, Kolkata (for short, tribunal ). 11. The stand of the appellant before the tribunal was that Notification No. 124/2000 which amended the earlier Notification No. 37/96 and enlarged the scope of exemption from basic customs duty by including SAD, should be considered as retrospective in view of the language employed in the Treaty entered into between the two countries. It was urged that all goods manufactured in Nepal and imported into India would be exempted from customs duty and equal to the excise duty for the time being leviable on similar products manufactured in India and as per the said Treaty, no SAD was leviable and hence, the notification dated 29.09.2000 was clarificatory in nature. It was further contended that levy of SAD after the rates were fixed was contrary to the terms of the Treaty and, therefore, it was rectifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held by the learned Member (Judicial) that the earlier notification exempted from basic custom duty and the latter from the SAD. Being of this view, the learned Member (Judicial) dismissed the appeal. 15. The Member (Technical) expressed his dissent and opined that once a Treaty had been entered by the Central Government, the issue of notification under the provisions of the Customs Act, 1962 is a ministerial act. According to the learned Member (Technical), the notification dated 29.09.2000 was a belated response to effectuate the terms of the Treaty. Elaborating further, the learned Member (Technical) observed that if it was a simplicitor amendment to exempt or reduce the rates on certain specified imports, then an amendment would have been required to be made to the Notification No. 18/2000-CUS dated 01.03.2000 and not to Notification No. 37/96 and that having been not done, it can be safely concluded that there was a belated reference and the real intention was to give retrospectivity to the notification. 16. It is apt to reproduce the observations made by the learned Member (Technical):- A Treaty entered into with a Sovereign State cannot be reneged, merely for wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpted. 22. Article 3 states that the contracting parties shall accord unconditionally to each other treatment not less favourable than what was accorded to a third country in respect of the customs duties and other charges relating to import and export including quantitative restrictions. Article 4 relates to reciprocal arrangement between the two contracting parties to exempt basic customs duty and quantitative restrictions on import as would be mutually agreed. Having referred to Articles 3 and 4, it is necessary to focus on Article 5. The said Article begins with non-obstante expression and would apply notwithstanding to Article 3. It is non-reciprocal. This Article states that the Government of India had agreed to promote industrial development of Nepal and further agreed to grant special favourable treatment to imports into India of industrial products manufactured in Nepal in respect of customs duty and quantitative restrictions normally applicable to them. The words used in Article 5 are customs duties . The non-reciprocal grant would be subject to exceptions as may be made after consultation with the Government of Nepal. As is evident, the Treaty was to be operative for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to additional duty collected by the Government of India in respect of manufactured articles other than those manufactured in small units: Wherever it is established that the cost of production of an articles is higher in Nepal than the cost of production in a corresponding unit in India, a sum representing such difference in the cost of production, but not exceeding 25 percent of the additional duty collected by the Government of India, will be paid of His Majesty s Government of Nepal provided. His Majesty s Government of Nepal have given assistance to the same extent to the (manufacturers) exporters. 5. Export of consignments from Nepal accompanied by the Certificate of Origin will normally not be subjected to any detention/delays at the Indian Customs border, border check posts and other places enroute. In case any need for clarification arises, this will be obtained expeditiously, by the Indian border customs authorities from the Indian and Nepalese authorities, as the case may be. 6. Where for social and economic reasons, the import of an item into India is permitted only through public sector agencies or where the import of an item is prohibited under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in India. 26. The aforesaid clauses oblige us to read the relevant portion of the first exemption Notification No. 37/96-COS dated 23rd July, 1996. It is as under:- Notification No. 37/96-Customs In exercise of the powers conferred by sub-section (1) of Section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts goods specified in column (2) of the Table below and falling within the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), when imported into India from Nepal, from the whole of the duty of customs leviable thereon under the First Schedule to the Customs Tariff Act, 1975, subject to the conditions, if any, specified in the corresponding entry in column (3) of the said Table . The table contains description of goods and enumerates certain conditions. What we are concerned with is the nature of exemption. As is noticeable, what was exempted under the notification were the goods specified in column 2 in the First Schedule to the Tariff Act from the customs duty leviable thereon under the First Schedule to the Tariff Act. It was also subject to the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 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. 30. We would now refer to the decision of the High Court of Patna in Kaur Sain Traders v. Union of India 2005 (2) PLJR 744. The said decision rightly observes and highlights the distinction between the basic customs duty i.e. the import duty, the additional duty equal to the excise duty, and special additional duty which has reference to sales-tax, local-tax and other charges leviable on the articles of sale and purchase in India. The said distinction is clear from Sections 2, 3 and 3A of the Tariff Act. Section 12 of the Customs Act, no doubt a charging Section, has to be read along with the Tariff Act. In fact, the Tariff Act also provides for further duties in the form of safeguarding duty under Section 8B, countervailing duty under Section 9 and anti-dumping duty under Section 9A. Section 25 of the Customs Act stipulates that the Government may exempt certain goods from all duties of cust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Indo-Nepal Treaty, verification could be undertaken by the Indian customs in Nepal and accordingly there was no reason not to extend the benefit in case of imports made from Nepal under Notification No.6/2002 dated 1st March, 2002. 32. Decisions in the case of W.P.I.L. Limited v. Commissioner, Central Excise 2005 (181) ELT 259 SC and Ralson India Limited v. Commissioner of Central Excise, Chandigarh 2015 (319) ELT 234 SC do not assist the appellant. In the said authorities, the contention of the assessee was accepted on the ground that both power driven pumps as well as parts of power driven pump had for long remained exempt. However, when earlier notifications were rescinded in order to consolidate and reduce the number of notifications and then the new notification was issued on 1st March, 1994 then by mistake and erroneously parts of power driven pump were not included, whereas manufacture of power driven pumps was included. In this context, it was held that the subsequent notification including parts of power driven pump was merely clarificatory and when clarificatory notifications are issued, they have retrospective effect. The instant case is not suggestive of any mistake ..... X X X X Extracts X X X X X X X X Extracts X X X X
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