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TMI Blog2021 (1) TMI 726X X X X Extracts X X X X X X X X Extracts X X X X ..... rates as may be specified under the Tariff Act. Section 2 of the Tariff Act provides that the rates at which duties of customs shall be levied under the Customs Act are specified in the First and the Second Schedules. Section 3 of the Tariff Act deals with levy of additional duty equal to excise duty, sales tax, local taxes and other charges. 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. It is clear that even the levy of additional duty under section 3 of the Tariff Act, which is in addition to the duty of customs under section 2 of the Tariff Act, would not be duty of customs for the purpose of Notifications issued under the Customs Act. 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 c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rated 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 - the additional duty leviable thereon under Section 3 of the Tariff Act and special duty of customs leviable under section 68(1) of the Finance Act have been replaced by the integrated tax under section 3(7) and compensation cess under section 3(9) of the Tariff Act. It cannot, therefore, be contended that duty of customs referred to in the condition against serial no. 2 of the Exemption Notification would include integrated tax. The inevitable conclusion that follows from the aforesaid discussion is that the absence of mention of integrated tax and compensation cess in column (3) under serial no. 2 of the Exemption Notification would mean that only the basic customs duty on the fair cost of repair charges, freight and insurance charges are payable and integrated tax and compensation cess are wholly exempted. The 415 orders passed by the Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its or other parts of the aircrafts began to develop defects, they were exported out of India for repairs to M/s Pratt Whitney, which is a maintenance and repair organisation specializing in maintenance of parts/ aircrafts. It is further stated that at times, the aircrafts also have to be exported out of India for repairs and maintenance. The repaired parts/ aircrafts are thereafter re-imported into India and at the time of re-import, Bills of Entry are filed. These Bills of Entry are assessed to basic customs duty and integrated tax at the applicable rates. The dispute in all these appeals is as to whether the Appellant is justified in claiming exemption of integrated tax under the Exemption Notification on re-import of repaired parts/ aircrafts into India during the period from August, 2017 to March, 2019. 5. The Appellant had claimed exemption at the time of re-import from payment of basic customs duty for aircrafts/ parts under a Notification No. 50/2017 dated June 30, 2017. There is no dispute in these appeals with regard to this exemption. The dispute is in regard to the levy of integrated tax on the re-import of aircrafts/ parts. The Appellant had claimed exemption from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2007. Section 3. Levy of additional duty equal to excise duty, sales tax, local taxes and other charges.- (1) Any article which is imported into India shall, in addition, be liable to a duty (hereafter in this section referred to as the additional duty) equal to the excise duty for the time being leviable on a like article if produced or manufactured in India and if such excise duty on a like article is leviable at any percentage of its value, the additional duty to which the imported article shall be so liable shall be calculated at that percentage of the value of the imported article. Provided xxxx xxxx xxxx Explanation - xxxx xxxx xxxx (7) Any article which is imported into India shall, in addition, be liable to integrated tax at such rate, not exceeding forty per cent as is leviable under section 5 of the Integrated Goods and Service Tax Act, 2017 on a like article on its supply in India, on the value of the imported article as determined under sub-section(8). (8) For the purposes of calculating the integrated tax under sub-section (7) on any imported article where such tax is leviable at any percentage of its value, the value of the imported article s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y in column (3) of the said Table. Table Sl No. Description of goods Conditions (1) (2) (3) 1. xxxx xxxx xxx xxxx xxxx xxxx 2. Goods, other than those falling under Sl No. 1 exported for repairs abroad Duty of customs which would be leviable if the value of re-imported goods after repairs were made up of the fair cost of repairs carried out including cost of materials used in repairs (whether such costs are actually incurred for not), insurance and freight charges, both ways. 11. Learned Counsel appearing for the Appellant made the following submissions: (i) Duty of customs, as mentioned in the conditions at serial no. 2 of Exemption Notification, cannot be interpreted to include integrated tax within its purview since a plain reading of the Exemption Notification clearly denotes that what is payable in terms of serial no. 2 is the duty of customs on the fair cost of repairs carried out including to and fro fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Authorised Representative of the Department, however, supported the impugned order passed by the Commissioner (Appeals) and made the following submissions: (i) The intention of the Exemption Notification is to give relief from levy of certain components of duty of customs , depending on the nature of the re-imported goods. The duty of customs, among others, includes (A) basic customs duty i.e. duty of customs leviable thereon under section 2 which is specified in the First Schedule and (B) Additional duty, integrated tax, compensation cess leviable thereon respectively under sub-sections (1), (7) and (9) of section 3 of the Tariff Act. In the body of the Exemption Notification, before the Table, while exempting the re-imported goods, the Notification categorically mentions duty of customs under First Schedule , besides integrated tax, additional duty and compensation cess, but while imposing conditions for the said exemption in column 3 of the Table, the Notification consciously uses the phrase duty of customs only, ( not duty of customs leviable thereon which is specified in the said First Schedule), which fact has to be given due weightage to appreciate the true ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... leviable thereon respectively under sub-sections (7) and (9) of section 3 of the Tariff Act, as is in excess of the amount indicated in the corresponding entry in column (3) of the Table. 16. The Exemption Notification makes reference to the Tariff Act. Section 12 of the Customs Act also provides that duties of customs on goods imported into India shall be levied at such rates as may be specified under the Tariff Act. Section 2 of the Tariff Act provides that the rates at which duties of customs shall be levied under the Customs Act are specified in the First and the Second Schedules. Section 3 of the Tariff Act deals with levy of additional duty equal to excise duty, sales tax, local taxes and other charges. Sub-section (1) provides that any article which is imported into India, shall in addition, be liable to a duty to be called as additional duty, which would be equal to the excise duty for the time being leviable on a like article if produced or manufactured in India. Sub-section (7) provides that any article which is imported into India shall, in addition, be liable to integrated tax at such rate, not exceeding 40 per cent as is leviable under section 5 of the Integrated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only under the provisions of the Customs Act and the Tariff Act but also under any other law for the time being in force . Thus, the integrated tax levaible on imported goods by the Integrated Tax Act would also be a duty of customs and, therefore, the Appellant was correctly denied exemption from integrated tax leviable under section 3(7) of the Tariff Act. 21. It is not possible to accept this contention of the learned Authorized Representative of the Department. Section 2(15) of the Customs Act defines duty to mean duty of customs leviable under the Customs Act. Section 12(1) provides that the duties of customs shall be levied at such rates as may be specified in the Tariff Act or any other law for the time being in force. It only means that the rates for duties of customs can be specified either under the Tariff Act or any other law for the time being in force. It does not expand the meaning of duties of customs . What is important to notice is that whereas section 2 of the Tariff Act refers to duties of customs , section 3 of the Tariff Act does not refer to duties of customs . It only provides for levy of additional duty equal to the excise duty, sales tax, local ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is, therefore, clear that even the levy of additional duty under section 3 of the Tariff Act, which is in addition to the duty of customs under section 2 of the Tariff Act, would not be duty of customs for the purpose of Notifications issued under the Customs Act. 25. The Bombay High Court in Ceat Tyres of India Limited vs. Union of India [ 1992 (57) ELT 221 (BOM.) ] also held that the expression duty of customs covered only the basic customs duty and not the additional duty. The observations are as follows: 2. By a Notification issued under section 25 (1) of the Customs Act, 1962, the goods specified in the Table thereto were, when imported into India, exempted from so much of that portion of the duty of Customs leviable thereon as was in excess of the rates specified in the corresponding column of the Table. The argument on behalf of the petitioners was that the expression duty of customs covered not only the basic customs duty but also additional and auxiliary duty. A Single Judge of this Court has taken the view that duty of customs covers only basic customs duty and not additional or auxiliary duty. The Kerala High Court has taken the same vie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r as may be prescribed and shall be paid by the taxable person: Provided that the integrated tax on goods imported into India shall be levied and collected in accordance with the provisions of section 3 of the Customs Tariff Act, 1975 (51 of 1975) on the value as determined under the said Act at the point when duties of customs are levied on the said goods under section 12 of the Customs Act, 1962 (52 of 1962). 28. It is, therefore, clear that though integrated tax is levied under section 5 of the Integrated Tax Act, but it is collected in accordance with the provisions of section 3 of the Tariff Act on the value as determined under the Tariff Act and at the point when duties of customs are levied under section 12 of the Customs Act. Thus, integrated tax is levied under section 5(1) of the Integrated Tax Act and only the procedure for collection has been provided under section 3 of the Tariff Act. 29. It also needs to be noted that the term integrated tax has not been defined either under the Customs Act or the Customs Tariff Act or under the Exemption Notification. As integrated tax is not levied under section 12 of the Customs Act, it cannot be called duty of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Department that omission to mention specified in the said First Schedule in the conditions set out in column (3) of the Table for serial no. 2 after Duty of customs , would mean that the Government intended to include integrated tax and compensation cess in the expression duty of customs . 34. It is not possible to accept this reasoning advanced by the learned Authorised Representative of the Department. In the first instance, the meaning assigned to duty of customs, as discussed above, is the meaning assigned to duty under section 2(15) of the Customs Act, which would be the duty leviable under section 12 of the Customs Act. Mere omission to mention specified in the First Schedule to the Tariff Act after Duty of customs in the conditions set out in column (3) of the Table for Serial No. 2 cannot lead to an inference that duty of customs would include integrated tax and compensation cess. Column (3) of the Table refers to Duty of customs which would be leviable. Section 2(15) of the Customs Act defines duty to mean a duty of customs leviable under the Customs Act. It is section 12 of the Customs Act which provides that the duties of customs shall be le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting that the exemption granted was in respect of the excise duty leviable under the Central Excises Salt Act, 1944, but in some exemption notifications only duty of excise was mentioned without specifying leviable under Central Excises Salt Act, 1944 . The Supreme Court observed that it is not uncommon that at times the Legislature, with a view to making its intention clear beyond doubt, uses words which may not be strictly necessary to be added since without them the same intention can be spelt out as a matter of judicial construction and this would be more so in the case of subordinate legislation by the executive. It often happens that the officer may employ words with a view to leaving no scope for possible doubts or even for greater completeness, though these words may not add anything to the word or scope to the subordinate legislation. Therefore, even if the words duty of excise leviable under the Central Excises and Salt Act, 1944 did not find place, as in the some exemption notifications, it would not necessarily lead to an inference that the expression duty of excise was intended to refer to all duties of excise, including the special auxiliary duties of excis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The absence of these words does not absolve us from the obligation to interpret the expression `duty of excise in these Notifications. We have still to construe this expression what is its meaning and import and that has to be done bearing in mind the context in which it occurs. We have already pointed out that these notifications having been issued under Rule 8(1), the expression `duty of excise in these notifications must bear the same meaning which it has in Rule 8(1) and that meaning clearly is excise duty payable under the Central Excises and Salt Act, 1944 as envisaged in Rule 2 clause (v). It cannot in the circumstances bear an extended meaning so as to include special excise duty and auxiliary excise duty. (emphasis supplied) 37. What also needs to be kept in mind is that mention of duty of customs, integrated tax and compensation cess in the main body of the Exemption Notification implies that the Government was conscious of the distinction between the three. What is also important to notice is that after the phrase duty of customs levied thereon which is specified in the said First Schedule , there is a comma before and the integrated tax, compensatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 E.R. 637), it must be held that the mischief was sought to be remidied thereby. It is, therefore, difficult to agree with Mr. Gupta that rice husk and paddy husk denote the same commodity. 41. The Supreme Court made the same observations in Kumho Petrochemicals Company Limited and the relevant paragraph is reproduced below: 32. The learned counsel for respondent rightfully pointed out that the legislature has consciously used the expression may and shall at different places in the same Section, i.e., Section 9A of the Act. In such a scenario, it has to be presumed that different expressions were consciously chosen by the Legislature to be used, and it clearly understood the implications thereof. Therefore, when the word may is used in the same Section in contradistinction to the word shall at other places in that very Section, it is difficult to interpret the word may as shall . Therefore, it is difficult to read the word may as shall . 42. The Andhra Pradesh High Court in Madhucon Projects Limited also observed that two different expressions in a statute must be construed to carry different meanings and the observations are as f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecial duty of customs leviable under sub-section (1) of Section 68 of the Finance (No. 2) Act, 1963 (33 of 1996), as is in excess of the amount indicated in the corresponding entry in column (3) of the said Table. Table Sl No. Description of goods Amount of Duty (1) (2) (3) 1. xxxx xxxx xxx xxxx xxxx xxxx 2. Goods, other than those falling under Sl No. 1 exported for repairs abroad Duty of customs which would be leviable if the value of re-imported goods after repairs were made up of the fair cost of repairs carried out including cost of materials used in repairs (whether such costs are actually incurred or not), insurance and freight charges, both ways. 45. 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 6 ..... 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