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TMI Blog2018 (2) TMI 1442X X X X Extracts X X X X X X X X Extracts X X X X ..... Nil rate of duty for unprocessed fabric was maintained and additional duty @ 8% for the processed fabric was prescribed. The contention that corrigendum dated 21st September 2000 must relate back to the original publication of rate of duty and that in any case the Parliament has power to make law with retrospective effect cannot be accepted. Firstly, the corrigendum is in the nature of a publication required since the original publication carried a wrong figure. The corrigendum is not a piece of legislation. The question of retrospective effect of such correction cannot be equated with exercise of the power of the Parliament to make a law with retrospective effect. In case of Union of India v. Ganesh Das Bhojraj [2000 (2) TMI 89 - SUPREME Court], it was observed that the exemption notification would take effect as soon as it is published in the Government Gazette. Publication in the Government Gazette is recognized as an established practice of bringing a rule or subordinate legislation to the notice of the persons concerned. It was observed that thereafter individual notices to members of public would not be necessary and the interested persons can acquaint himself with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e increased to 12% from 10% and the additional duty would be reduced from 10% to 8%, thereby still maintaining total collection of duty on processed fabric at the rate of 20% ad valorem . Such Budget proposals were accepted by the Parliament and the Finance Act, 1996 passed by the Parliament contained such amendments in the Schedule to the Tariff Act. However, when the draft of the Act was sent for printing, there were certain inadvertent errors due to which the basic rate of duty prescribed for both processed and unprocessed fabric was printed as 10% ad valorem. It appears that the published rate of additional duty for processed fabric was also 10% . According to the Union of India, realizing that such a printing error has crept-in in the Gazetted Finance Act, a corrigendum came to be issued on 15th January 1997 correcting such printing errors and specifying that the actual basic rate of duty for such fabric would be 12% - whether processed or unprocessed. On the basis of such publication, the respondent no. 3 started issuing show cause notices to the petitioners for collection of Excise duty @ 12% instead of 10%, which the petitioners were paying. First such notice was is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e applied retrospectively to cover clearances of the petitioners which were made long before. We would refer to the detailed materials on record, while dealing with the contentions of advocates from both the sides. For the present, in the background of above controversy, we may record their contentions. Learned counsel Shri Dave for the petitioners submitted that all official publications of the Government of India, post-budget of 1996, prescribe 10% basic duty for unprocessed and processed fabrics. It is not clear what were the budgetary proposals placed before the Parliament. In any case, the applicable rates would be those which are made part of the law passed by the Parliament. In the present case, the official publications indicate that the Parliament had prescribed fresh rate of basic duty @ 10% on both kinds of fabric. The petitioners were therefore justified in carrying the belief that this was the correct rate of duty to be collected and paid to the Government. Counsel further submitted that even if there was a typographical error, the same cannot be corrected with retrospective effect long after the Act was passed by the Parliament. First attempt was made by the Gov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mited Anr. vs. State of Maharashtra Anr ., reported in 1993 Mh.L.J 13. To resolve the controversy, we may have a closer look at the materials on record. As noted, before promulgation of the Finance Act, 1996 under sub-heading 5801.21 of Heading 5801 of Chapter 58, the Tariff Act prescribed 20% of the basic rate of duty on the processed fabric and Nil rate of additional duty. Likewise, under sub-heading 5801.22, on processed fabric, the basic as well as additional duty would be collected @ 20% each. In the Finance Bill which was initially presented before the Parliament on 22nd July 1996, the amendments proposed in these entries was that the basic rate of duty would be reduced to 10% and in case of processed fabric, rate of additional duty would also be brought down to 10%, whereas, Nil rate of additional duty would be maintained in case of unprocessed fabric. From the replies filed by the Government of India, however, we find that there was a re-think on these rates and the Finance Bill itself was amended. An amendment was moved on 9th September 1996 before the Parliament under which manufacturing of both kinds of fabrics would invite basic duty @ 12% and in case of proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... line 39, for 10%, read 12% ; at page 59, in line 9, for 6.M.M , read 6MM . In the corrigendum dated the 15th January 1997, the line 39 of the Finance Bill, 1996 in page 52 was wrongly quoted as line 31. Thereafter, the corrections as set out hereinabove were carried out during the year 2000, to correct the error with regard to identification of the line in which the correction was carried out. The stand of the Government thus clearly is that the intention of the Parliament always was to revise the basic rate of duty for both processed and unprocessed fabrics to 12% and that is how, the Act itself was passed. However, in the Gazetted Notification, published on 28th September 1996, there were certain printing errors. These were sought to be corrected through corrigendum dated 15th January 1997. The publication of rate of 10% of the basic duty was to be read as 12%. The Government also admits that even this corrigendum contained certain errors, in particular where the corrigendum refers to line 31 of page 52 of the Finance Act to be read as 12% instead of 10%. It is now admitted that even this reference to line 31 was erroneous and had a reference to line 39 of page 52. To co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Companies Act, 1956; the State Bank of India [Subsidiary Banks] Act, 1959; the Industrial Development Bank of India Act, 1964, the Banking Companies [Acquisition Transfer of Undertakings] Act, 1970; the Banking Companies [Acquisition Transfer of Undertakings] Act, 1980 and the Depositories Act, 1996. The Ordinance thus aimed at amending various laws principally concerning the Banking Institutions. At the end of the ordinance, the said corrigendum dated 15th January 1997 was appended. Thus, the corrigendum was published as a part of an ordinance. Whereas, the Ordinance pertains to completely unrelated subjects and Acts and had nothing to do with the Central Excise Act, or Central Excise [Tariff] Act. Further, this corrigendum also failed to achieve its desired object. The object of the corrigendum was to prescribe 12% as the correct rate of basic duty for processed and unprocessed fabric. The corrigendum made many corrections in the published Finance Act, 1996. One of them was, in page 52, in line 31 for 10% read 12% . It is an admitted position that line 31 had no reference to the rate of duty for fabric in question. Any manufacturer of the product, even if therefor had ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssue had become academic. The dispute survived only till February 1999, but what the Department now wishes to do is to apply such correction made in September 2000 for clearances made by the petitioners between November 1996 to February 1999. If we permit the Department to do so, we would be breaching the basic principle of collection of duty or Cess by the Government at the rate other than the published rates. Publication of the rate of duty has an important purpose of making the manufacturers aware about the prevailing rate of duty which they would be required to deposit and manage their affair accordingly. It is undoubtedly true that the complex economic structure of the modern economies require periodical adjustment of tax rates. Rate of duty can be changed abruptly, or even if there are sufficient reasons, with retrospective effect. Such changes would be notified in th official Gazette. Main object of such publication being to put the public at large and the affected tax payers/manufacturers in particular to notice about such changes through official source. However, the duty in the present case is sought to be collected at rates higher than the published rates by making corre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri Dave, subsection 1 of Section 38 of the Central Excise Act provides that all rules made and notifications issued under the Act shall be published in the Official Gazette. In case of Mahendra Lal Jaini v. State of U.P Ors . [Supra], the Supreme Court observed that a Notification which was issued superseding the earlier notification was never published in the Official Gazette, and therefore, would have no effect. In case of State of Kerala Ors. v. P.J Joseph [Supra], it was observed that the fees cannot be collected for license without publication thereof. In case of Union of India v. Ganesh Das Bhojraj [Supra], it was observed that the exemption notification would take effect as soon as it is published in the Government Gazette. Publication in the Government Gazette is recognized as an established practice of bringing a rule or subordinate legislation to the notice of the persons concerned. It was observed that thereafter individual notices to members of public would not be necessary and the interested persons can acquaint himself with the contents of the notification published in the Gazette. Similar view was expressed in the case of Pankaj Jain Agencies v. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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