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TMI Blog2021 (1) TMI 663X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, it cannot be called duty of customs . The charging section for integrated tax, in terms of which it is levied, is section 5 of the Integrated Tax Act and not section 3(7) of the Tariff Act. Section 3 (7) of the Tariff Act only provides for the manner of collection of the said integrated tax to be done by the Customs Authorities in case of import of goods It would also be relevant to refer to the entries at serial no. 1 of the Exemption Notification. Serial no. 1 specifically refers to what types of duties or taxes are leviable under different situations. There is a specific reference to integrated tax in column (3) in connection with serial no. 1 (d) and to integrated tax and compensation cess in connection with serial no. 1(e). There is, therefore, enough intrinsic evidence in the Exemption Notification itself to show that integrated tax cannot be understood as duty of customs in the Exemption Notification - It would be seen that the aforesaid Notification refers to the duties of customs leviable thereon which is specified in the said first schedule, the additional duty leviable thereon under section 3 of the Tariff Act and special duty of customs leviable under section 68(1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 51459 of 2019, 51460 of 2019, 51461 of 2019, 52434 of 2019, 52435 of 2019, 52436 of 2019, 52437 of 2019, 52438 of 2019, 52439 of 2019, 52440 of 2019, 52441 of 2019, 52442 of 2019, 52443 of 2019, 52444 of 2019, 52445 of 2019, 52446 of 2019 ORDER All these 61 appeals have been filed by M/s Spice Jet Limited [the Appellant]. The issue raised in all these appeals is about the availability of Integrated Goods and Service Tax [the Integrated Tax] exemption provided at serial no. 2 in the General Exemption Notification No. 45/2017 dated June 30, 2017 [the Exemption Notification], as amended by Corrigendum Notification dated July 22, 2017, to aircrafts and parts thereof that are re-imported into India after repairs. The Appeals seek the quashing of the orders passed by the Commissioner of Customs (Appeals) [the Commissioner] that uphold the orders of assessment of Bills of Entry, as a result of which all the appeals have been dismissed by the Commissioner (Appeals). 2. It needs to be noted that 10 out of these 61 appeals have been filed by the appellant to assail the orders passed by the Commissioner (Appeals) that have been dismissed for the reason that they had been filed beyond the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gard to the levy of integrated tax on the re-import of aircrafts/ parts. The Appellant had claimed exemption from payment of integrated tax under the Exemption Notification for the reason that the importer is required to only pay duty of customs on the fair cost of repairs and the cost of insurance and freight charges, both ways. The Customs Authorities, however, did not agree on this issue with the Appellant, as according to them the Appellant was not entitled to full exemption from payment of integrated tax since the phrase duty of customs at serial no. 2 of the Exemption Notification, includes both the basic customs duty as also integrated tax. Thus, according to the Authorities, the appellant was required to pay integrated tax, in addition to the basic customs duty, on the fair cost of repairs and the cost of insurance and freight charges, both ways. 7. The Commissioner, therefore, disallowed the integrated tax exemption claimed by the Appellant on all the 58 Bills of Entry and integrated tax was levied on the fair cost of repairs and the cost of insurance and freight charges, both ways. It is against the aforesaid assessment that the Appellant had filed appeals before the Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s value, the value of the imported article shall, notwithstanding anything contained in section 14 of the Customs Act, 1962, be the aggregate of- (a) the value of the imported article determined under sub-section (1) of section 14 of the Customs Act, 1962 or the tariff value of such article fixed under sub-section (2) of that section, as the case may be; and (b) any duty of customs chargeable on that article under section 12 of the Customs Act, 1962, and any sum chargeable on that article under any law for the time being in force as an addition to, and in the same manner as, a duty of customs, but does not include the tax referred to in sub-section (7) or the cess referred to in sub-section. (9) Any article which is imported into India shall, in addition, be liable to the goods and services tax compensation cess at such rate, as is leviable under section 8 of the Goods and Services Tax (Compensation to States) Cess Act, 2017 on a like article on its supply in India, on the value of the imported article as determined under sub-section (10). (11) The duty or tax or cess, as the case may be, chargeable under this section shall be in addition to any other duty or tax or cess, as th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xpressions duty of customs and integrated tax at different places in the Notification, and so the same have to be understood differently and one cannot be substituted with the other. In support of this contention, reliance has been placed on the following decisions: (a) Devidayal Electronics & Wires Limited and another versus Union of India and another [1984 (16) ELT 30 (Bom.)]. (b) Commissioner of Trade Tax, U.P. versus S.S. Ayodhya Distillery [2009 (233) ELT 146 (S.C.)]. (c) Union of India versus Kumho Petrochemicals Company Limited [2017 (351) ELT 65(S.C)]. (d) Madhucon Projects Limited versus Cus., Ex. & S.T. SETT. COMM. Chennai [2016 (44) STR 321 (A.P.)]; (iii) A comparison of the Exemption Notification with Customs Notification No. 241 dated November 4, 1982, wherein exemption from payment of basic customs duty and integrated tax have been granted under different circumstances, clearly depicts that integrated tax cannot be included in duty of customs; (iv) A comparison with Customs Notification No. 52/2003 dated March 31, 2003 also indicates that integrated tax cannot be included in duty of customs. The Central Government, through various amending notificati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on Notification is almost a replica, since after the introduction of Goods and Service Tax, CVD has been replaced by integrated tax; (iii) An assessee cannot pick and choose Notifications to unlawfully enrich himself and if a narrow interpretation is given to the submissions made by the learned Counsel for the Appellant, there will be large revenue implications; and (iv) Though the Exemption Notification is clear, but even if it is assumed that there is any ambiguity, then too the benefit should go the Revenue as was observed by the Supreme Court in Commissioner of Customs (Import) Mumbai versus Dileep Kumar and Company [2018 (361) ELT 577 (S.C)] and in M/s LR Brothers India Overseas Limited [2020-TIOL-145-SC-CUS]. 14. The submissions advanced by the learned Counsel for the Appellant and the learned Authorised Representatives of the Department have been considered. 15. Section 25 of the Customs Act deals with power to grant exemption from duty. Sub-section (1) of section 25 of the Customs Act is reproduced below: "25. Power to grant exemption from duty.- (1) If the Central Government is satisfied that it is necessary in the public interest so to do, it may, by notif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her law for the time being in force. Sub-section (12) states that the provision of the Customs Act and the rules and regulations made thereunder, including those relating to exemption from duty shall, so far as may be, apply to the duty or tax or cess, as the case may be, chargeable under section 3 as they apply in relation to the duties leviable under that Act. 18. There is no dispute that it is serial no. 2 of the Exemption Notification that is applicable to aircrafts/ parts re-imported into India after repairs. What would, therefore, be payable in terms of serial no. 2 would be the duty of customs on the fair cost of repairs carried out including cost of materials used in repairs, insurance and freight charges, both ways. 19. The Exemption Notification does not define the phrase duty of customs. However, section 2(15) of the Customs Act defines "duty" to mean duty of customs leviable under the Customs Act. The said section 2(15) of the Customs Act is reproduced below: "2(15). "duty" means a duty of customs leviable under this Act;" 20. Section 12 of the Customs Act deals with dutiable goods. Sub-section (1) of section 12 is reproduced below: "Section 12. Dutiable goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that expression, wherever it occurs in the Act, Rules or Notifications issued thereunder, should be understood in the same sense. It is for this reason that it has been contended by learned Counsel for the Appellant that the expression "duty of customs" appearing at serial no. 2 of the Exemption Notification can have only that meaning which is assigned to it under section 2(15) of the Customs Act, which would be the "duty" leviable under the Customs Act and any other duty or tax which is not levied under the Customs Act, but levied under other enactments cannot be treated as a "duty of customs" for the purpose of customs notification. 24. It is also relevant to refer to the judgment of the Supreme Court in Collector of Customs, Madras vs. Indian Organic Chemicals Limited [2000 (118) ELT 3 (S.C)]. Section 19 of the Customs Act relates to determination of duty where goods consist of articles liable to different rates of duty. Section 3 of the Tariff Act deals with levy of additional duty equal to excise duty. The Supreme Court held that since section 19 of the Customs Act applies to determination of "duty", it would only relate to "duty" under the Customs Act as is clear from secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tingency Duty, Education Cess and Secondary and Higher Education Cess are in the nature of additional excise duty and when an exemption notification exempts duty of excise it would not automatically mean that these additional excise duties are also exempted. Thus, it was held that these additional duties do not come within the scope of the term "duty of excise". 28. Integrated Tax has been defined under section 2(12) of the Integrated Tax Act to mean the "integrated goods and services tax levied under the Integrated Tax Act. Section 5 of the Integrated Tax Act deals with levy and collection. It provides that there shall be levied a tax called the integrated goods and services tax on all inter-State supplies of goods or services or both on the value as determined under section 15 of the Central Goods and Services Act and at such rates, not exceeding 40 per cent as may be notified by the Government. The proviso stipulates that the integrated tax on goods imported into India shall be levied and collected in accordance with the provisions of section 3 of the Tariff Act on the value as determined under the Tariff Act at the point when duties of customs are levied on the said goods und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion but it can only have that meaning which has been assigned to the meaning of 'duty' under section 2(15) of the Customs Act. It would, therefore, mean the "duty of customs" leviable under the Customs Act and any other duty not levied under the Customs Act, would not be duty of customs for the purposes of any Notification issued under the Customs Act. (2) Integrated tax has also not been defined under the Exemption Notification. It has been defined under section 2(12) of the Integrated Tax Act to mean the tax levied under the Integrated Tax Act. Integrated Tax is levied under section 5 of the Integrated Tax Act and not under section 12 of the Customs Act, and therefore, cannot be called as duty of customs; and (3) Section 3 (7) of the Tariff Act only provides the manner of collection of the integrated tax by the customs authorities in case of import of goods. 32. It is in the light of the aforesaid discussion that the meaning assigned to duty of customs in the Exemption Notification has to be understood. 33. A perusal of the main body of the Exemption Notification would indicate that it refers not only to duty of customs leviable thereon which is specified in the First ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s also necessary to consider whether omission to add 'specified in the First Schedule' after 'Duty of Customs' in the conditions set out in column (3) of the Table at serial number 2 is deliberate or unintentional. To appreciate this, it would be necessary to examine whether it was at all necessary to add 'leviable thereon which is specified in the said First Schedule' after 'duty of customs' in the main body of the Exemption Notification. As noticed above, even if 'leviable thereon which is specified in the said First Schedule' after 'duty of customs' in the main body of the Exemption Notification, had not been added, it would have necessarily meant duty of customs that is defined under section 2(15) of the Customs Act read with section 12 of the Customs Act and section 2 of the Tariff Act. This in turn, would relate to the First Schedule of the Tariff Act. It, therefore, follows that it is only as a matter of abundant caution and only to make the intention clear beyond any doubt that the main body of the Exemption Notification includes duty of customs specified in the First Schedule. Thus, no significance can be attached to the fact that 'specified in the First Schedule' has not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed specific language indicating that the exemption, total or partial, granted under each such notification is in respect of excise duty leviable under the Central Excises and Salt Act, 1944. But, merely because, as a matter of drafting, the Central Government has in some notifications specifically referred to the excise duty in respect of which exemption is granted as `duty of excise' leviable under the Central Excises and Salt Act, 1944, it does not follow that in the absence of such words of specificity, the expression `duty of excise' standing by itself must be read as referring to all duties of excise. It is not uncommon to find out that the legislature sometimes, with a view to making its intention clear beyond doubt, uses language ex abundanti cautela though it may not be strictly necessary and even without it the same intention can be spelt out as a matter of judicial construction and this would be more so in case of subordinate legislation by Executive. The officer drafting a particular piece of subordinate legislation in the Executive Department may employ words with a view to leaving no scope for possible doubt as to its intention or sometimes even for greater completenes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n something other than "factory". 40. This judgment of the Bombay High Court in Devidayal Electronics was approved by the Supreme Court in Collector of Central Excise vs. Himalayan Co-op. Milk Product Union Limited [2000 (122) ELT 327 (S.C)]. 41. It would also be pertinent to refer to the decision of the Supreme Court in S. S. Ayodhya Distillery. The issue that arose before the Supreme Court was whether "paddy husk" can be treated as "rice husk". The Supreme Court held that when two expressions have been used in the same Notification, two different meanings should be assigned thereto. The observations are as follows: "11. As paddy and rice are considered to be the separate commodities, paddy husk cannot be treated to be rice husk. Not only in the notification dated 7-9-1981 but also in the notification dated 5-6-1985 paddy husk is not mentioned. By reason of notification dated 6-6-1996 'paddy husk' was inserted. Even then, the rice husk was not deleted. No explanation was offered therefor. Both rice husk and paddy husk, thus, found place in the notification. Indisputably, therefore, paddy husk was subjected to for the first time by reason of the said notification dated 6- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this connection it would also be relevant to refer to the entries at serial no. 1 of the Exemption Notification. Serial no. 1 specifically refers to what types of duties or taxes are leviable under different situations. There is a specific reference to integrated tax in column (3) in connection with serial no. 1 (d) and to integrated tax and compensation cess in connection with serial no. 1(e). There is, therefore, enough intrinsic evidence in the Exemption Notification itself to show that integrated tax cannot be understood as duty of customs in the Exemption Notification. 45. Learned Authorized Representatives of the Department have placed reliance upon the exemption Notification No. 94/96 dated December 16, 1996. The relevant portion is reproduced below : "Exemption to re-import of goods exported under duty drawback, rebate of duty or under bond - In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962) and in supersession of the Notification of the Government of India in the Ministry of Finance, (Department of Revenue), No. 97/95-Customs, dated the 26 May, 1995 the Central Government, being satisfied that it is necessary in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the fair cost of repair charges, freight and insurance charges are payable and integrated tax and compensation cess are wholly exempted. 48. It would, therefore, not be necessary to examine the contention of learned Authorised Representatives of the Department that in case of any ambiguity in an Exemption Notification, the benefit should go to the Revenue. It would also not be necessary to examine the remaining contentions advanced by the learned Counsel for the Appellant that the activity of repairs is "supply of service" or that the activity would not fall under the category of 'import of service' under the Integrated Tax Act since the necessary ingredients mentioned therein have not been fulfilled. 49. Thus, for all the reasons stated above, it is not possible to sustain the orders impugned in 51 appeals upholding the assessments made on the Bills of Entry. These orders passed by the Commissioner (Appeals) are, accordingly, set aside and it is held that the Appellant is entitled to exemption from payment of integrated tax under the Exemption Notification on re-import of repaired parts/ aircrafts into India. 50. Thus, the 10 appeals, whose numbers have been provided in par ..... X X X X Extracts X X X X X X X X Extracts X X X X
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