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TMI Blog2024 (3) TMI 508X X X X Extracts X X X X X X X X Extracts X X X X ..... t the rate fixed under Section 28AB of the Customs Act, 1962. It is a common principle of law that a legislation is always prospective in nature unless when by express words or by necessary implication the provisions are declared or construed to have retrospective effect - Also it is well established that a substantive provision of law cannot be considered to be retrospective unless specified to the contrary by the Legislature. The court s have repeatedly held the amendment to Section 18 of the Act, as a substantive piece of legislation and it cannot be considered to be of a clarificatory nature. The same cannot be therefore given a retrospective effect. The provisions of Section 18(3) of the Act, would have no application to the present case and the Assessment Order demanding payment of interest, in respect of provisional assessment made prior to 13.07.2006 is not in accordance with law. The said issue being no more res integra, it need to be also pointed out that with the reference to similar provisions on the excise side, incorporated vide Rule 7(4) of the Central Excise Rules, 1944, the Board Vide Order- Instruction- Central Excise issued vide their Reference No.- F.No. 354/66/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... res) (earlier classification of imported goods being under 9801 as project imports). It is not in dispute that the duty as liable on the imported goods subsequent to the final assessment has been duly paid by the appellant and a differential duty amount of Rs. 92,83,716/- was paid in pursuance of the order in original, passed by the learned Deputy Commissioner of Customs, Group 6 Arrear Cell vide orders dated 24 March 2014. Vide the instant order in appeal under challenge, the appellant in their appeal have agitated the direction to pay interest and that too on the entire duty amount leviable on the said goods. 3. The appellant submits that they are not liable to pay any interest confirmed upon finalization of the provisional assessment. It is their case that the said provisional assessment had been undertaken prior to the incorporation of the said provisions [Section 18(3)] in law carried out by Taxation Laws Amendment Act 2006 with effect from 13.07.2006. They submit that in their case, the goods were imported in the year 1997 98 and also ex bonded during the period 1998-99. 4. Vehemently arguing on their proposition the learned C.A Ms. Payal Bharawani points out that Section 18 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the time of final assessment at the rate fixed under Section 28AB of the Customs Act, 1962. It is a common principle of law that a legislation is always prospective in nature unless when by express words or by necessary implication the provisions are declared or construed to have retrospective effect. Thus, in the case of Binani Industries Ltd. Vs. CCT, (2007) 15 SCC 435 . Hon'ble Supreme Court held as under: 13. It is a cardinal principle of construction that every statute is prima facie prospective unless it is expressly or by necessary implication made to have a retrospective operation.......... Unless there are words in the statute sufficient to show the intention of the legislature to affect existing rights, it is deemed to be prospective only- nova constitutio futuris formam imponere debet non praeteritis - a new law ought to regulate what is to follow, not the past. (See. Principles of Statutory Interpretation by Justice G.P. Singh, 9th Edn., 2004 at p. 438.)........ Further, in the case of CIT (Central), New Delhi Vs. Vatika Township Private Limited (2015) 1 SCC 1 which relied upon Govind Das Vs. ITO (1976) 1 SCC 906 to state that prima facie any statute entails prosp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 18(3)] being a part of the statute. 8. It would be noteworthy to point out that the amendment made in Section 18 of the Customs Act, 1962 w.e.f. 13.07.2006, vide Section 21 of the Taxation Laws (Amendment) Act, 2006, inserting sub-sections (3), (4) (5) to Section 18, came up for consideration before the Hon'ble Gujarat High Court in the case of Commissioner of Customs Vs. Hindalco Industries Ltd., 2008 (231) ELT 36 (Guj.) in the context of applicability of the provisions of unjust enrichment in Section 27 of the Customs Act, 1962 to a case of refund arising upon finalization of provisional assessments made under Section 18 of the Customs Act, 1962, prior to 13.07.2006. The Hon'ble High Court held as under: 18. On a plain reading it becomes apparent that sub-sections (3) and (4) relate to liability to pay interest or entitlement to claim interest consequent upon final assessment order. However, sub-section (5) is the material amendment which indicates that the Proviso, appearing below sub-section (2) of Section 27 of the Act has now been incorporated as a part of Section 18 of the Act. On a plain reading the distinction between Section 18 as it stood prior to amendment i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iability has placed reliance on the following cases: (i) Bhagyanagar Metals Ltd. Vs. Commissioner of C. Ex., Hyderabad-II 2016 (333) ELT 395 (Tri- LB) to hold as under: 45. We find that precedents referred to by Revenue are not applicable to the facts of the present case. In Commissioner of Trade Tax, Lucknow Vs. Kanhai Ram Thekedar (supra) the Hon ble Supreme Court was dealing with the need for issuing separate demand for recovery of interest. In BHEL Vs. CC CE, Kanpur (supra) the Hon ble Allahabad High Court was dealing with provisions of Rule 7 (4) of Central Excise Rules, 2002 read with Section 37(2) of the Central Excise Act, 1944, the Hon ble High Court held that the interest is compensatory in nature and becomes due when the duty payment was not made in time. In CC, Bangalore Vs. Pierre Colsun Inc. (supra), the Hon ble Karnataka High Court was dealing with the obligation to pay interest in terms of Section 28AA. We find that in the present case, there was provisional assessment which was later finalized. Since, at the time of resorting to the provisional assessment there was no statutory provision authorizing imposing of interest on the differential duty, (the provision whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atute inconsistent with substantive rights is prima facie considered prospective unless it is expressly or by necessary implication may have been given retrospective operation (refer to the decision or Apex Court in case of Keshavan Medhava Menon Vs. State of Bombay- AIR 1951 SC 128). 16. Particularly, in fiscal legislation imposing liabilities generally governed by the normal rule is that it is not retrospective in nature. It is, however, equally undisputed that a procedural provision when made applicable to pending proceedings would not be viewed as given retrospective operation to the liability. In case of Govinddas and Ors. Vs. the Income Tax Officer and Anr.- AIR 1977 Supreme Court 552, the Apex Court was . 17. In the present case, we find that prior to introduction of sub-section (3) of Section 18 of the Act in the present form, there was no liability to pay interest on difference between finally assessed duty and provisionally assessed duty upon payment of which the assessee may have cleared the goods. It was only with effect from 13-7-2006 that such charging provision was introduced in the statute. Upon introduction therefore such provision created interest liability for th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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