TMI Blog2015 (11) TMI 1466X X X X Extracts X X X X X X X X Extracts X X X X ..... of 16% advalorem levied by Notification dated 27.2.2010 could not be imposed retrospectively w.e.f. 26.6.2009 and, therefore, retrospective amendment is illegal and arbitrary and deserves to be set aside. Petitioner is entitled for exemption from payment of custom duty for the period 26.6.2009 to 15.9.2010 on the electricity cleared to DTA from SEZ. We are further of the considered opinion that the entire proviso to Government Notification No.25/2010-Customs dated 27.2.2010 is violative of Section 25(1) of the Customs Act, 1962 read with Section 30(a) of the SEZ Act, arbitrary and liable to be quashed. In view of the above, the said Notification No.25/2010-Customs dated 27.2.2010 as well as Notification No.21/2002-Customs as amended by Clause 60 of the Finance Bill, 2010 (Second Schedule thereto) are ultra vires Entry 83 of List I of Seventh Schedule of the Constitution of India, Section 12 of Customs Act, 1962 and Section 30 of SEZ Act, 2005 as well as Articles 14 and 265 of the Constitution of India and consequently deserves to be quashed and set aside. - Decided in favour of assessee. - Special Civil Application No. 3142 of 2010 - - - Dated:- 15-7-2015 - Vijay Manohar Sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssion network, information technology network, hospitals, hotels, educational institutions, leisure, recreational and entertainment facilities, residential and business complex, water supply, including desalination plant, sanitation facility. 4. MPSEZ is a multi-product SEZ covering an area of 6472.8684 hectares and electricity is required for both processing and non-processing areas. The Company therefore joined as Co- Developer to set up the Mundra Power Plant which is a coal based thermal power plant. This project was initially planned to generate 1320 MW which was increased to 2640 MW and ultimately to 4620 MW. In the year 2010, the petitioner Company was in the process of setting up thermal power plant with total capacity of 4620 MW, out of which two units of 330 MW each have been commissioned at Mundra within the SEZ. 5. The power supply from the power plant which is inside the SEZ area from where the power is supplied outside the SEZ area is in dispute in this petition. The petitioners have challenged the vires of Notification No.25/2010-Customs dated 27.2.2010 on the ground that the notification is ultra vires to Entry 83 of List I of Schedule VII of the Constitution, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 30(a) since the goods are being brought from the Special Economic Zone to Domestic Tariff Area, then it has to be treated as imported goods which has come from outside India and, therefore, item No.27160000 which is the goods known as electrical energy removed from the Special Economic Zone to the Domestic Tariff Area would be exempted as it will be treated to be imported from outside India and 16% advalorem custom duty cannot be charged by the respondent because Section 25(1) is not charging Section, but it is the section which grants exemption from payment of customs duty. It is not disputed by Mr. Devang Vyas, learned Assistant Solicitor General of India for the respondents that proviso to Notification dated 27.2.2010 exempted electrical energy which is imported into India from the whole of payment of customs duty. It is urged by the counsel for the petitioners that the proviso to Notification No.25/2010 Customs, New Delhi dated 27.2.2010 is violative of provisions of Section 25(1) of the Customs Act, 1962 and arbitrarily imposes customs duty treating electrical energy falling under Tariff Item No.20170000 removed from the Special Economic Zone to the Domestic Tariff Are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (52 of 1962) or the Customs Tariff Act, 1975 (51 of 1975) or any other law for the time being in force, on goods imported into, or service provided in, a Special Economic Zone or a Unit, to carry on the authorized operations by the Developer or entrepreneur; (b) exemption from any duty of customs, under the Customs Act, 1962 (52 of 1962) or the Customs Tariff Act, 1975 (51 of 1975) or any other law for the time being in force, on goods exported from, or services provided, from a Special Economic Zone or from a Unit, to any place outside India; (c) exemption from any duty of excise, under the Central Excise Act, 1944 (1 of 1944) or the Central Excise Tariff Act, 1985 (5 of 1986) or any other law for the time being in force, on goods brought from Domestic Tariff Area to a Special Economic Zone or Unit, to carry on the authorized operations by the Developer or entrepreneur; (d) drawback or such other benefits as may be admissible from time to time on goods brought or services provided from the Domestic Tariff Area into a Special Economic Zone or Unit or services provided in a Special Economic Zone or Unit by the service providers located outside India to carry on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clear that the Act clearly provided exemptions to a Developer or the entrepreneur exemptions from payment of custom or excise duty, service tax, securities transaction tax, taxes on sale or purchase of goods which are meant to carry on the authorized operation by the Developer or the entrepreneur within the SEZ area or the unit. Therefore, goods can be imported within SEZ area and exported outside the SEZ area on which no duty were leviable as mentioned above and exemptions were granted by the SEZ Act. But, these exemptions would not be available to a Developer or a unit situated within the SEZ area if it removes any goods from SEZ to DTA than duty or tax was leviable on the Developer or the unit. 13. The petitioner had commissioned two units of 330 MW each at Mundra Plant. A part of the electricity is sold outside the SEZ to Gujarat Urja Vikas Nigam Limited (GUVNL), a Distribution Company/ Licencee of the Government of Gujarat and others. Section 30 of the SEZ Act provides for levy of duty on goods removed from SEZ area into DTA. 14. From the perusal of Section 30 of the SEZ Act, it is clear that any goods removed from SEZ to DTA are chargeable to duties of customs including ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... India into India. 19. A conjoint reading of Entry 83 of List I of Schedule VII and Section 12 of the Customs Act shows that the levy under the said Act is on goods which are physically imported from territory outside India into India. On the other hand, duty under Section 30 of the SEZ Act is not on import of goods into India because the word import as defined in the SEZ Act does not cover removal of goods from SEZ in DTA. Section 30 of the SEZ Act is a special provision which provides for levy of duty without any specific name thereto. Section 30 is Legislation by legislative reference in as much as it seeks to adopt and borrow the provisions of the Customs Tariff Act for the purpose of quantification of the duty levied there under. In calculating the duty liability under Section 30, the rate of duty as specified in Customs Tariff Act has to be read with another Notification issued under Section 25 of the said Act for the time being in force in relation to the goods sought to be removed from SEZ into DTA. 20. By virtue of Entry 83 of List I of Schedule VII to the Constitution of India, the said Act has been enacted to provide for levy of customs duty on goods imported int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wer generated in a Special Economic Zone's Developer's Power Plant in the SEZ or Unit's captive power plant or diesel generating set made by transferred to Domestic Tariff Area on payment of duty on consumables and raw materials used for generation of power subject on the following conditions, namely :- (a) Proposal for sale of surplus power received by the Development Commissioner, shall be examined in consultation with the State Electricity Board, wherever considered necessary; PROVIDED that consultation with State Electricity Board shall not be required for sale of power within the same Special Economic Zone; (b) norms for production of a unit of power shall be approved by the Approval Committee; (c) sale of surplus power to other Unit or Developer in the same or other Special Economic Zone or to Export Oriented Unit or to Electronic Hardware Technology Park Unit or to Software Technology Park Unit or Bio-technology Park Unit, shall be without payment of duty; (d) for sale of surplus power in Domestic Tariff Area, the Unit shall obtain permission from the Specified Officer and the State Government authority concerned; (e) duty on sale of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to such action taken or anything done or omitted to be done as if the amendment made in said notifications had been in force at all material times. (4) Recovery shall be made of the amount which has not been paid but which would have been paid as if the amendment made in the manner specified in said sub-section (1) had been in force at all material times. Explanation :- For the removal of doubts, it is hereby declared that no act or omission on the part of any person shall be punishable as an offence which would not have been so punishable if the notifications referred to in this section had not been amended retrospectively. 26. The Government of India by GSR No.118 (E) dated 1.3.2002 (21/2002-Customs dated 1.3.2002) issued the Notification which provided electrical energy when imported into India is exempt from whole of the customs duty in terms of Serial No.573 of the Table annexed to the said Notification. This Notification was amended with effect from 26.6.2009, splitting Serial No.573 of the Table of Notification dated 1.3.2002 with retrospective effect from 26.6.2009 by Notification No.25 of 2012-Customs GSR (E) dated 27.2.2010 which is reproduced as under : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 27.2.2010, GSR (E) exercising powers under subsection (1) of Section 25 of the Customs Act, 1962 in public interest exempted goods falling under Tariff Item No.27160000 of the First Schedule to the Customs Tariff Act, 1975 when imported into India from the whole of the duty of customs leviable on it. However, a proviso was added to this notification that this exemption under Tariff Item No.27160000 shall not apply to electrical energy removed from a Special Economic Zone to the Domestic Tariff Area or non-processing areas of Special Economic Zones. The learned Senior counsel for the petitioners has vehemently urged that the Specified Officer, MPSEZ, Mundra, on 26.2.2010 illegally demanded duty, though in Union Budget 2010, electrical energy removed from the Specified Economic Zone to the Domestic Tariff Area and non-processing area of SEZ would not attract duty of 16% advalorem and a change has been made retrospectively w.e.f. 26.6.2009 and directed the petitioner No.1 to start the payment of duty from SEZ to DTA and non-processing areas of SEZ w.e.f. 26.6.2009. This letter dated 26.2.2010 was written by the Specified Officer, MPSEZ, Mundra one day prior to issuance of the ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nded by Clause 60 of Finance Bill, 2010 read with Notification 25/2010-Cus dated 27.2.2010. The said Notification has immediate effect from 27.2.2010. By virtue of enactment of Clause 60 of the Finance Bill 2010, the amendment to the said Notification No.21/2002-Cus is given retrospective effect from 26.6.2009. 32. On 27.2.2010, the petitioner Company received letter dated 26.2.2010 from the respondent No.4 requesting to start payment of duty immediately with retrospective effect from 26.6.2009. The petitioner Company addressed letter dated 27.2.2010 to the respondent No.4 informing that the petitioner Company was working out the mechanism and procedure for fulfillment of conditions and, therefore, presented a Bond for the purpose of considering removal of electricity from Special Economic Zone to Domestic Tariff Area. Thereafter, the petitioner Company received a letter dated 3.3.2010 returning the aforesaid bond presented before the respondent No.4 and further requesting the petitioner Company to file Bills of Entry for the Electrical Energy cleared from 27.2.2010 onwards and pay applicable duty immediately. 33. The effect under Section 26 cannot exceed the charging provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent fields. Section 30 of the SEZ Act does not refer to the word import . Section 30 of the SEZ Act does not provide for levy of goods imported into SEZ as per the word import defined in SEZ Act. For goods imported into SEZ, customs duty is levied under Section 12 of the said Act, but on account of Section 26 of the SEZ Act, there is an exemption from payment of such customs duty. The provisions of Section 12 of the said Act are applicable to SEZ only in so far as and limited to import of goods into SEZ from a place outside India. The provisions of the said Act are not applicable at any stage thereafter in so far as SEZ Act is concerned. At the point of entry of the goods into the territorial waters of India from a place outside India where the provisions of the Customs Act are applicable in so far as SEZ is concerned, no customs duty is payable by virtue of the exemption under Section 26 thereof. The provisions of the Customs Act are thereafter exhausted and have no further role to play. Consequently, when goods are removed from SEZ into DTA, it is the provision of Section 30 of the SEZ Act which shall prevail. This is also provided for in Section 51 of the SEZ Act which contai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... @ 16% on electrical energy removed from SEZ and a totally new and additional liability in respect of electricity removed into nonprocessing areas of SEZ although there is no liability to do so under the SEZ Act and the SEZ Rules. Therefore, the impugned Notification is violative of Article 265 of the Constitution of India. The customs duty @ 16% has been made applicable to electrical energy removed from a Special Economic Zone to a Domestic Tariff Area or non-processing area of Special Economic Zone w.e.f. 26.6.2009. In fact, levy customs duty @ 16% is part of the Finance Bill and has not become an Act. Under the circumstances, the demand of customs duty raised by the respondent No.4 on the basis of such a Bill is not sustainable in as much as a Bill is a proposal for levy of the Tax. 38. That Section 30(a) of the SEZ Act provides that any goods removed from SEZ to DTA shall be chargeable with customs duty and other duties under the Customs Tariff Act, 1975 where applicable, as leviable on such goods when imported. Vide Clause 60(1) of the Finance Bill, 2010, Entry at Serial No.573 of the Table to Notification No.27/2002-Cus dated 1.3.2002 came to be substituted with retrospecti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and non processing areas of the zone would attract duty of 16% advalorem and this change is being made retrospectively with effect from 26.6.2009. In response, the petitioner Company informed the Specified Officer on 27.2.2010 that they are working out a mechanism and procedure for fulfillment of conditions and, therefore, presented a bond for the purpose of considering removal of electricity from SEZ to Domestic Tariff Area ('DTA' for short). 40. On 1.3.2010, Central Government issued Notification No.25/2010-Customs dated 27.2.2010 levying advalorem customs duty @ 16% on the electrical energy removed from SEZ to DTA. Thereafter, vide letter dated 3.3.2010, the Specified Officer returned the bond presented by the petitioner Company and requested to file bills of entry for the electrical energy cleared from 26.2.2009 and to pay applicable duty. Being aggrieved by the aforesaid Government Notification, the petitioners have filed the present petition. 41. Mr. Kamal B. Trivedi, learned Senior Counsel appearing for the petitioners drew our attention to various statutory provisions and argued that the petitioner Company being a SEZ unit cannot be saddled with such duty liab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... particular class are treated equally and uniformly. 43. Section 30 of the SEZ Act, 2005 is the charging section whereby duty is imposed in respect of goods removed from SEZ to DTA. Section 30(a) provides that any goods removed from SEZ to DTA shall be chargeable to customs duties, etc. as leviable on such goods when imported. Section 30(b) provides that the rate of duty applicable shall be the rate on the date of removal. The said section, therefore, incorporates by reference rates of customs duties as applicable when goods are imported into India from outside India for goods removed from SEZ to DTA and that the levy of duty is not under the Customs Act. Section 51 of the SEZ Act gives overriding to the provisions of SEZ Act and that being so, the same will prevail over any other law including the Customs Act. Thus, when no customs duty is payable on goods imported in India, no duty would be payable on similar goods transferred from SEZ to DTA in view of Section 30 read with Section 51 of the SEZ Act. 44. The Division Bench of this Court in its judgment dated 27-28.11.2014 rendered in Special Civil Application No.8869 of 2014, Roxul Rockwool Insulation India Private Limited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owth. The term Domestic Tariff Area is defined in Section 2(i) as to mean the whole of India (including the territorial waters and continental shelf) but does not include the areas of the Special Economic Zones. The term Special Economic Zone is defined in Section 2(za) as to mean an economic zone notified under the proviso to sub-section (4) of Section 3 and subsection (1) of Section 4 (including Free Trade and Warehousing Zone) and includes an existing Special Economic Zone. Section 51 of the SEZ Act provides that the provisions of the Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any instrument having effect by virtue of any law other than this Act. Sub-section (1) of Section 53 provides that a SEZ shall on and from the appointed day be deemed to be a territory outside the customs territory of India for the purposes of undertaking the authorized operations. Chapter IV of the SEZ Act pertains to special fiscal provisions for SEZs. Section 26 contained in the said Chapter grants exemptions, drawbacks and concessions to every developer and entrepreneur such as exemption from payment of any cust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the power of the Central Government to grant exemption from payment of customs duty. Section 25(1) of the said Act reads as under :- 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 notification in the Official Gazette, exempt generally either absolutely or subject to such conditions (to be fulfilled before or after clearance) as may be specified in the notification goods of any specified description from the whole or any part of duty of customs leviable thereon. 52. We deem it necessary to point out over here that in the affidavit-in-reply filed by Commissioner of Customs, on behalf of respondent nos.1 and 2, notification No.60/2010-Customs dated 10.5.2010 is filed which is reproduced as under :- Notification No.60/2010-Customs New Delhi, the 10th May, 2010 G.S.R. (E) - In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government hereby rescinds the notification of the Government of India in the Ministry of Finance (Department of Revenue) no.25/2010-Customs, dated the 27th Februar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are being brought from SEZ to DTA, then it has to be treated as imported goods which has come from outside India and, therefore, item No.27160000 which is the goods known as electrical energy removed from the SEZ to DTA would be exempted as it will be treated to be imported from outside India and 16% advalorem cannot be charged by the respondents because Section 25(1) of the Customs Act, 1962 is not charging Section, but it is the Section which grants exemption from payment of customs duty. It is not disputed by the respondents that proviso to Government Notification No.25/2010-Customs dated 27.2.2010 exempted electrical energy which is imported into India from the whole of payment of customs duty. Therefore, proviso to Government Notification No.25/2010-Customs dated 27.2.2010 is violative of provisions of Section 25(1) of the Customs Act, 1962 and arbitrarily impose customs duty treating electrical energy falling under Tariff Item No.20170000 removed from SEZ to DTA chargeable to Customs duty. Therefore, entire proviso to Government Notification No.25/2010-Customs dated 27.2.2010 is violative of Section 25(1) of the Customs Act, 1962 read with Section 30(a) of the SEZ Act, arbit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... legislation invalid are now well recognized and these are (i) discrimination, based on an impermissible or invalid classification and (ii) excessive delegation of powers; conferment of uncanalised and unguided powers on the executive, whether in the form of delegated legislation or by way of conferment of authority to pass administrative orders if such conferment is without any guidance, control or checks, it is violative of Article 14 of the Constitution. The Court also needs to be mindful that a legislation does not become unconstitutional merely because there is another view or because another method may be considered to be as good or even more effective, like any issue of social, or even economic policy. It is well settled that the courts do not substitute their views on what the policy is. The Constitution Bench of the Apex Court in Subramaian Swamy v. Director, Central Bureau of Investigation and another (2014) 8 SCC 682 after considering catena of decisions on Article 14 has laid down the law as to on what ground a Legislation could be quashed under Article 14 of the Constitution of India. 57. We may now examine as to the Notification dated 27.2.2010 which levied customs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld to be relevant factor to construe a statute conferring a benefit, in the context of it to be given a retrospective operation. The same doctrine of fairness, to hold that a statute was retrospective in nature, was applied in the case of Vijay v. State of Maharashtra and others (2006) 6 SCC 286. It was held that where a law is enacted for the benefit of community as a whole, even in the absence of a provision the statute may be held to be retrospective in nature. However, we are not confronted with any such situation here. 57.2 In such cases, retrospectively is attached to benefit the persons in contradistinction to the provision imposing some burden or liability where the presumption attaches towards prospectivity. In the instant case, the proviso added to Section 113 of the Act is not beneficial to the assessee. On the contrary, it is a provision which is onerous to the assessee. Therefore, in a case like this, we have to proceed with the normal rule of presumption against retrospective operation. Thus, the rule against retrospective operation is a fundamental rule of law that no statute shall be construed to have a retrospective operation unless such a construction appears ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e-amended provision was clear and unambiguous. An amending Act may be purely clarificatory to clear a meaning of a provision of the principal Act which was already implicit. A clarificatory amendment of this nature will have retrospective effect and, therefore, if the principal Act was existing law which the Constitution came into force, the amending Act also will be part of the existing law. The above summing up is factually based on the judgments of this Court as well as English decisions. 57.4 A Constitution Bench of this Court in Keshavlal Jethalal Shah v. Mohanlal Bhagwandas Anr. [(1968) 3 SCR 623], while considering the nature of amendment to Section 29 (2) of the Bombay Rents, Hotel and Lodging House Rates Control Act as amended by Gujarat Act 18 of 1965, observed as follows :- The amending clause does not seek to explain any pre-existing legislation which was ambiguous or defective. The power of the High Court to entertain a petition for exercising revisional jurisdiction was before the amendment derived from S.115, Code of Civil Procedure, and the legislature has by the amending Act attempted to explain the meaning of that provision. An explanatory Act is genera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nst there the revenue, has to be preferred. This is a well established principle of statutory interpretation, to help finding out as to whether particular category of assessee are to pay a particular tax or not. No doubt, with the application of this principle, Courts make endeavour to find out the intention of the legislature. At the same time, this very principle is based on fairness doctrine as it lays down that if it is not very clear from the provisions of the Act as to whether the particular tax is to be levied to a particular class of persons or not, the subject should not be fastened with any liability to pay tax. This principle also acts as a balancing factor between the two jurisprudential theories of justice - Libertarian theory on the one hand and Kantian theory along with Egalitarian theory propounded by John Rawls on the other hand. 57.8 Tax laws are clearly in derogation of personal rights and property interests and are, therefore, subject to strict construction, and any ambiguity must be resolved against imposition of the tax. In Billings v. U.S.[232 U.S. 261, at p.265, 34 S.Ct. 421 (1914)], the Supreme Court clearly acknowledged this basic and long-standing ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mendment takes effect retrospectively from 01.04.2002. Various other amendments also take place retrospectively. The Notes on Clauses show that the legislature is fully aware of 3 concepts:- (i) prospective amendment with effect from a fixed date; (ii) retrospective amendment with effect from a fixed anterior date; and (iii) clarificatory amendments which are retrospective in nature. 57.12 Thus, it was a conscious decision of the legislature, even when the legislature knew the implication thereof and took note of the reasons which led to the insertion of the proviso that the amendment is to operate prospectively. Learned counsel appearing for the assessees sagaciously contrasted the aforesaid stipulation while effecting amendment in Section 113 of the Act, with various other provisions not only in the same Finance Act but Finance Acts pertaining to other years where the legislature specifically provided such amendment to be either retrospective or clarificatory. In so far as amendment to Section 113 is concerned, there is no such language used and on the contrary, specific stipulation is added making the provision effective from 1st June, 2002. 57.13 Furthermore, an amendment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of opining as to whether the court independently would have arrived at a conclusion that organizing lottery would amount to rendition of service but not otherwise. 37. As it is not possible for us to arrive at the said conclusion, we have no other option but to hold that by inserting the explanation appended to clause (19) of Section 65 of the Act, a new concept of imposition of tax has been brought in. The Parliament may be entitled to do so. It would be entitled to raise a legal fiction, but when a new type of tax is introduced or a new concept of tax is introduced so as to widen the net, it, in our opinion, should not be construed to have a retrospective operation on the premise that it is clarificatory or declaratory in nature. 38. There cannot be any doubt whatsoever that speech of the Hon'ble Finance Minister in the House of the Parliament may be taken to be a valid tool for interpretation of a statute. It was so held in K.P. Varghese v. Commissioner of Income-tax, Ernakulam and another [(1981) 4 SCC 173 at 184], in the following terms:- 8. Now it is true that the speeches made by the Members of the Legislature on the floor of the House when a Bill ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... effect from May, 2008 and not with retrospective effect. In a case of this nature, the Court must be satisfied that the Parliament did not intend to introduce a substantive change in the law. 52. As stated herein before, for the aforementioned purpose, the expressions like for the removal of doubts are not conclusive. The said expressions appear to have been used under assumption that organizing games of chance would be rendition of service. We are herein not concerned as to whether it was constitutionally permissible for the Parliament to do so as we are not called upon to determine the said question but for our purpose, it would be suffice to hold that the explanation is not clarificatory or declaratory in nature. 60. From the Constitution Bench decision of the Apex Court in Vatika's case, it is clear that any amendment which seeks to levy tax or custom duty for the first time can only be prospective as it amounts to substantive law. Such law cannot be retrospective and the notification dated 27.2.2010 levying custom duty with retrospective effect from 26.6.2009 is illegal, arbitrary and liable to be quashed. 61. The levy of custom duty is illegal as it amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 25(1) of the Customs Act, 1962 read with Section 30(a) of the SEZ Act, arbitrary and liable to be quashed. In view of the above, the said Notification No.25/2010-Customs dated 27.2.2010 as well as Notification No.21/2002-Customs as amended by Clause 60 of the Finance Bill, 2010 (Second Schedule thereto) are ultra vires Entry 83 of List I of Seventh Schedule of the Constitution of India, Section 12 of Customs Act, 1962 and Section 30 of SEZ Act, 2005 as well as Articles 14 and 265 of the Constitution of India and consequently deserves to be quashed and set aside. 63. For the reasons given above, this writ petition succeeds and is allowed. The entire proviso to the Government Notification No.25/2010-Customs dated 27.2.2010 at Annexure A to this writ petition is held to be ultra vires Articles 14 and 265 of the Constitution of India and is accordingly quashed. The petitioners are entitled for exemption from payment of custom duty for the period 26.6.2009 to 15.9.2010 on the electricity cleared to DTA from SEZ. The respondent authority is directed to return back the Bank Guarantee furnished by the petitioners in compliance of the interim order dated 6.5.2010 passed by this Court ..... X X X X Extracts X X X X X X X X Extracts X X X X
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