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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 ..... Schedule to the Central Excise Tariff Act, 1985 ["Tariff Act" for short]. The Cotton fabrics are admittedly classified under sub-headings 5801.22 and 5801.21 of the Tariff respectively; depending upon the fact that the fabric is processed or unprocessed. Till the passing of Budget for the Financial Year 1996-97, these items - whether processed or unprocessed fabrics, invited basic duty @ 20% ad valorem. For the unprocessed fabric, additional rate of duty was Nil and for the processed fabric, additional rate of duty was 20%. The entire controversy started with passing of the Budget in September 1996 by the Parliament, which eventually became the Finance Act of 1996. The case of the Government of India is that initially, the Finance Bill which was presented by the Finance Minister proposed slashing of the rates of Excise duty to 10% basic duty for both kinds of fabrics, and to 10% of additional duty for processed fabric; while maintaining Nil rate of additional duty for unprocessed fabric. However, before the Finance Bill became an Act, a proposal was moved to make amendments in the Bill itself which would ensure that the unprocessed fabric would attract basic duty @ 12% and no add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e was that under the Finance Act of 1996, manufacturers of unprocessed and processed fabrics would pay basic duty at the rate of 10% ad volarem. The petitioners had collected such duty from the customers and discharged their liability towards Department by depositing the same in the form of Excise duty. The petitioners contended that the corrigendum dated 15th January 1997 was never made available to the public at large. Even, the Departmental authorities were in dark. The petitioners in their representations to the higher authorities ie., the Commissioner and the Chief Commissioner had asked for copy of such publication which was never supplied. In any case, even the said corrigendum dated 15th January 1997 did not correctly clarify the issue. There were printing mistakes in such corrigendum also. Going by corrigendum also, no intention could be discerned that the correct rate of basic duty on unprocessed and processed fabric would be 12%. The petitioners also pointed out that large number of authentic publishers of the Central Excise Manuals had printed 10% rate of duty in both cases. If at all, it was only by virtue of the later corrigendum dated 21st September 2000 that the sit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gly opposed the petition contending that mere printing error would not change the rate of duty prescribed by the Parliament under the law. All that these corrigenda did was to correct the printing errors and the same would therefore relate back to the date when the law was passed by the Parliament and therefore, what became the effective rate of duty. Shri Vyas in particular submitted that the petitioners were well aware of such development especially when the respondent no. 3 issued notices pointing out such facts to the petitioners. They cannot claim ignorance of the change in the prescribed rate of duty. The petitioners had in fact paid additional duty on processed fabric at the rate of 8%. They therefore cannot avoid payment of basic rate of duty at 12%. He submitted that it is within the power of the Parliament to prescribe collection of duty with retrospective effect. The manufacturers cannot argue that on account of such retrospective levy of duty, it would not be possible for them to pass on the burden to the ultimate customers, and that therefore, any such law with retrospective effect should be held ultra vires. Counsel relied upon Full Bench judgment of the Bombay High C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls contained in the Finance Bill 1996 were introduced through an official amendment to the Bill on the 9th September 1996 and the Parliament passed the Finance Bill with this amendment. Hence, the tariff rate for these headings of Chapter 58 became 12% on passage of the Bill and subsequent assent to it by the President of India. 8. It is respectfully submitted that the Gazette of India, Extraordinary published in Part II Section 1 on the 28th September 1996 by the Ministry of Law and Justice, Legislative Department contained the Act of Parliament which received the assent of the President on that date and titled it as, "The Finance [No. 2] Bill, 1996, 33 of 1996 dated 28th September 1996. Apart from the above error in printing, the said publication in the Official Gazette carried several other clerical errors which were corrected by a Corrigenda dated 15th January 1997 published by the Ministry of Law and Justice, Legislative Department. The said publication did not cure all the mistakes pointed out at the time of publication of the Finance Act, 1996 and hence, a Corrigenda was subsequently issued on 21st September 2000 to incorporate the following changes, namely; at page 52, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... collected from the manufacturer different from what the Parliament prescribed under the Finance Act, arises on account of various errors committed by the respondents in publication of such rate of duty. What has come on record as undisputed, or at any rate indisputable position is that after the Finance Act 1996 was passed, it received ascent of the President and thereby became a law, the official publications printed 10% as basic rate of duty for unprocessed as well as processed fabric. In fact, the same error also continued while printing the additional rate of duty for processed fabric at 10% instead of 8%; as per the amendments. As noted, first attempt to correct this error was made through corrigendum dated 15th January 1997. This corrigendum could be of no great assistance to the respondents - firstly, it was made part of an Ordinance called, "The Depositories Related Laws [Amendment] Ordinance, 1997." This Ordinance was promulgated by the President since the Parliament was not in session and there was a need to take immediate action. This Ordinance was a common ordinance to amend various Acts, such as, the Indian Stamp Act, 1899; the State Bank of India Act, 1955; the Compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble to deduce that in the corrigendum dated 15th January 1997, the reference to the rate of duty was with respect to line no. 39 and not 31; as printed. This page contains various entries. These are in the nature of amendments in the Schedule to the Central Excise Tariff Act. Varying rates of duty are prescribed under the new prescriptions. At atleast at one more place, the revised rate of duty prescribed under the said Act is 10%. There is no warrant or any indication in the said corrigendum to presume that the reference is only with respect to various fabrics referred to in the concerned para pertains to line no. 39. This entire confusion was cleared by the subsequent corrigendum dated 21st September 2000, which even the petitioners would not be in a position to argue that it did not refer to the correct entry, or did not make required corrections. However, such corrections made in the year 2000, long after the rate of duty was published by the Government of India in its official publications, which was also carried by several authentic publishers in their Excise Manuals cannot be applied with retrospective effect. By the time this corrigendum was issued, the entire issue had be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same was corrected through proper mechanism. In other words, the respondents had not produced a copy of the corrigendum dated 15th January 1997 so as to impute its knowledge to the petitioners. Even if it was produced; as noted, this corrigendum did not in any manner have the desired effect of correcting the publication of rate of duty from 10% to 12%, if it at all had compounded the confusion. 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. If the corrigendum was needed to apprise the public at large about the correct rate of duty, applying it from the original date of prescription of the revised rate of duty would frustrate the purpose. As correctly pointed out by Shri Dave, sub ..... X X X X Extracts X X X X X X X X Extracts X X X X
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