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TMI Blog2025 (2) TMI 320X X X X Extracts X X X X X X X X Extracts X X X X ..... mendment Notification providing otherwise, the said Amendment Notification shall come into force on the date of its issue by the Central Government i.e. 19.07.2021. The Amendment Notification dated 19.07.2021 cannot, therefore, have retrospective effect.
The issues that have been raised in these appeals were also raised before the Division Bench of this Tribunal in InterGlobe Aviation Limited vs. Commissioner of Customs, New Delhi [2024 (8) TMI 1523 - CESTAT NEW DELHI] and it was held that the Amendment Notification dated 19.07.2021 cannot have a retrospective effect.
Conclusion - The Amendment Notification dated 19.07.2021 cannot be said to be retrospective in nature. Findings to the contrary recorded by the Commissioner (Appeals) in the impugned orders on the basis of the Circular dated 19.07.2021 issued by CBIC basis the minutes of the meeting of the GST Council cannot, therefore, be sustained.
The impugned order set aside - appeal allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... 1975) and specified in column (2) of the Table below when re-imported into India, from so much of the duty of customs leviable thereon which is specified in the said First Schedule, and the integrated tax, compensation cess leviable thereon respectively under sub-section (7) and (9) of section 3 of the said Customs Tariff Act, 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 Conditions (1) (2) (3) 1. ***** ***** 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. 3 - 5 ***** ***** Explanation. - ***** (a) ***** (b) ***** (c) *****" (emphasis supplied) 3. A Division Bench of this Tribunal in InterGlobe Aviation Ltd. vs. Commissioner of Customs, New Delhi [2020 (43) G.S.T.L. 410 (Tri. - Del.)] after referring to sections 2(15), 12(1) of the Customs Act and sub-sections (1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Exemption Notification would only mean the duty of customs leviable under the Customs Act as have been specified in the First and Second Schedules to the Tariff Act and not to integrated tax, which is levied under section 5 of the Integrated Tax Act. ***** 39. 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, compensation cess leviable thereon". This also clearly shows that duty of customs, integrated tax and compensation cess are three different entities. Above all, all the three, namely, duty of customs, integrated tax and compensation cess have been used in the main body of the same Exemption Notification. ***** 48. 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 Exemp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the said Customs Tariff Act, besides the customs duty as specified in the said First Schedule, calculated on the value as specified in column (3), and the exemption, under said serial numbers, is only from the amount of said tax, cess and duty over and above the amount so calculated." (emphasis supplied) 9. On the same date, the Central Board of Indirect Taxes and Customs [CBIC] also issued a clarification regarding applicability of integrated tax on repair cost, insurance and freight on goods re-imported after their export for repairs. This clarification was issued basis the recommendation made by the GST Council in its 43rd Meeting held on 28.05.2021. It states that the matter was placed before the GST Council in view of the decision rendered by the Tribunal on 02.11.2020 in InterGlobe Aviation and that the GST Council recommended that a suitable clarification, including any clarifictory amendment, if required, may be issued for removal of any doubt to clarify the decision of the GST Council that re-import of goods sent abroad for repairs attracts integrated tax and cess. The Circular provides that the clarifictory amendment was being issued to give effect to the recommen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l, at the time of roll out of GST decided to continue the concession as were available under the said notification No. 94/96-Cus, with only consequential amendment, i.e, replacing additional duties of customs with IGST and Compensation cess, as discussed in the 14th Meeting of the GST Council. Accordingly, under GST, IGST and Compensation cess were made applicable on the value of repairs, insurance and freight on re-import of goods sent abroad for repair. 5. Again, during the 37th GST Council Meeting, while examining the request to make available the credit of ITC paid on aircraft engines and parts exported for repairs and later reimported, the leviability of IGST on such imports, on the cost of repairs, insurance and freight charges, was affirmed. In fact, this was never disputed in first place and the request was to allow credit of the IGST so paid. Similarly, while examining the question of GST rate on maintenance, repair and overhauling (MRO) services in respect of aircraft, aircraft engines and other components and parts, the leviability of IGST on such re-imports was again affirmed by the GST Council in its 39th meeting, making it explicitly clear that such goods reimporte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... July, 2021, without prejudice to the leviability of IGST, as above, on such imports as it stood before the amendment. 9. The contents of this circular may please be brought to the notice of trade and industry through issue of Trade/ Public notices. The field formations may also be suitably sensitized in this regard. Difficulty, if any, in the implementation of this Circular may be brought to the notice of this office." (emphasis supplied) 10. The Commissioner (Appeals), in the orders impugned in the appeals, considered the Amendment Notification dated 19.07.2021 as also the Circular dated 19.07.2021 issued by the CBIC and observed that a conjoint reading of the two would make it clear that Explanatory Note 'd' is clarificatory in nature and hence would have retrospective effect. 11. Ms. Nupur Maheshwari, learned counsel for the appellant made the following submissions: (i) The issue as to whether the phrase 'duty of customs' as mentioned under serial no. 2 of the Exemption Notification includes integrated tax has been settled by the Tribunal in the decision rendered on 02.11.2020 in InterGlobe Aviation and subsequent decisions in Interglobe Aviation Ltd. vs. Commissioner o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nserted Explanation (d), will not, by itself, make such amendments clarificatory. The Amendment Notification has created a new and additional liability of integrated tax on the re-import of goods, which was not payable under the un-amended Notification, as interpreted by the Tribunal in InterGlobe Aviation. Thus, once the amendment creates a new liability it cannot have retrospective effect. In this connection reliance has been placed on the judgment of the Supreme Court in Sedco Forex International Drill. Inc. and others vs. Commissioner of Income Tax and another [2005 (11) TMI 25-SC] ; and (vii) While interpreting an Exemption Notification, what is relevant is the text and the language employed in the Notification and not the intention of the Government or the authority issuing the Exemption Notification. In this connection reliance has been placed on the Constitution Bench judgment of the Supreme Court in Hemraj Gordhandas vs. H.H. Dave Assistant Collector of Central Excise & Customs [1978 (2) E.L.T. J 350 (S.C.)] . 12. Shri S.K. Rahman, learned authorized representative appearing for the department, however, supported the impugned order and made the following submissions: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alling within any Chapter of the First Schedule to the Tariff Act and specified in column (2) of the Table when re-imported into India, from so much at the duty of customs leviable thereon which is specified in the First Schedule, and the integrated tax, compensation cess 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 said Table. 14. The main body of the Exemption Notification refers not only to duty of customs leviable thereon which is specified in the First Schedule to the Tariff Act, but also to integrated tax and compensation cess, but column (3) of the Table accompanying the main Notification against serial number 2 refers to only 'duty of customs' on the fair cost of repairs carried out with insurance and freight charges. 15. It is for this reason that the Division Bench of the Tribunal in InterGlobe Aviation held that the expression duty of customs occurring in the column (3) of the Table at serial number (2) of the Exemption Notification would only mean the duty of customs leviable under the Customs Act as have been specified in the First ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2021 decided on 05.08.2024] and it was held that the Amendment Notification dated 19.07.2021 cannot have a retrospective effect. The relevant paragraphs of the decision are reproduced below: "34. It needs to be remembered that the Amendment Notification does not state that it is retrospective in nature and only an inference is sought to be drawn by the department that the amendment would have retrospective effect because of use of the words 'it is clarified' and 'for removal of doubt'. 35. A clarificatory provision generally seeks to supply an obvious omission or to clear doubts on the meaning of the language used in the previous provisions. It makes explicit or clears the meaning of a provision contained in the Act, which meaning was already implicit. The Courts have repeatedly held that in such a situation it is necessary to first consider the meaning of the provision to which Explanation is added without such Explanation, and then compare the same with the meaning given by the added Explanation. If the result is same, then alone the Explanation can be considered to be clarificatory in nature and given a retrospective effect from the inception of the original provision. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be retrospective in nature, more so when neither clause (i) nor clause (ii) specifically mentions that it is retrospective in nature. Section 25(4) of the Customs Act also makes it abundantly clear that every Notification issued under sub-section (1) or sub-section (2A) of section 25 of the Customs Act shall, unless otherwise provided, come into force on the date of its issue by the Central Government for publication in the Official Gazette. At the cost of repetition, the Amendment Notification dated 19.07.2021 issued under section 25(1) does not provide that it would be applicable retrospectively. Thus, in terms of section 25(4) of the Customs Act, it would come into force on the date of its issue by the Central Government for publication in the Official Gazette. 47. Explanation (d), as would be seen, merely clarifies clause (i) of the Amendment Notification dated 19.07.2021. When both clause (i) and Explanation (d) are read together, the same meaning is arrived at. However, when Explanation (d) is compared with the un-amended Exemption Notification, different meanings come out. ***** 65. The aforesaid discussion leads to the inevitable conclusion that the Amendment Not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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