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2017 (11) TMI 494 - HC - CustomsDuty Free Import Authorisation Scheme (DFIA) - Petitioner, a transferee of DFIA, purchased the scrips and utilised the same for discharging duty liability against various Bills of Entry under N/N. 40 of 2006 and 17 of 2009 dated 19.2.2009 - demand of additional duty along with interest from the date of clearance not be recovered from it on the materials imported under various bills of entry as per N/N. 40 of 2006 as amended by condition (iiia) of N/N. 17 of 2009 Customs along with penalty u/s 114-A of the CA 1962 - demand on the ground that the petitioner had not declared at the time of clearance of the goods. Held that: - The Foreign Trade Policy for the period 2004 2009 extended a duty free import authorisation allowing duty free imports of inputs used in the manufacture of products for export. The scheme came into force from 01.05.2006. Para 4.4.7 of the scheme as it originally stood stipulated that CENVAT Credit Facility was available for the inputs either imported or procured indigenously against the DFIA. While this is so, an amendment was brought in vide Finance No.2, Finance Act (2) dated 19.08.2009 as per which DFIAs issued between the period 01.05.2006 to 31.03.2007 attracted payment of additional customs duty/excise duty with effect from 01.05.2006 if the additional condition set out in the proviso was not complied with. The condition imposed vide the amending Notification is incapable of satisfaction retrospectively. The petitioner, by virtue of the burden imposed under the amendment is required to have furnished the details relating to availment of duty by the transferor of the scrip at the original instance. Apart from being practically unworkable, the amendment imposes a condition that nullifies a right that vested in the petitioner and creates a burden that the petitioner would be incapable of discharging. While the satisfaction of the condition post date of Notification is mandatory and, accepted to be so by the petitioner we agree that the retrospective application of the same is liable to be interfered with. In our view, condition (iii)(a) imposed in Notification 17 of 2009 must be read to have been enacted from and with effect from 19.2.2009 only. The amendment applied retrospectively would no doubt destroy the vested right of the petitioner and substantively so. The Supreme Court has consistently upheld the position that any amendment should seek to correct an error that was contained in the original enactment. In the circumstances of the present case, the error can be corrected only prospectively and retrospective application of the amendment would not stand the test of law. Petition allowed - decided in favor of petitioner.
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