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TMI Blog2020 (11) TMI 151X X X X Extracts X X X X X X X X Extracts X X X X ..... mption Notification], as amended by Corrigendum Notification dated July 22, 2017, to aircrafts and parts thereof that are re-imported into India after repairs. 2. The Appeals seek the quashing of the 346 orders passed by the Commissioner of Customs (Appeals)[ the Commissioner] that uphold the orders of assessment of Bills of Entry, as a result of which all the appeals have been dismissed by the Commissioner (Appeals). 3. The records indicate that the Commissioner (Appeals) had passed the following six main orders, while deciding the 349 Appeals that had been filed : (i) The order dated April 30, 2019 upholding the orders of assessment of 159 Bills of Entry. This order, therefore, has led to the filing of 159 appeals before the Tribunal. (ii) The order dated September 28, 2018 upholding the order of assessment of 39 Bills of Entry. This has resulted in the filing of 39 appeals before the Tribunal. (iii) The order dated August 31, 2018 upholding the order of assessment of 96 Bills of Entry. Accordingly, 96 appeals have been filed before the Tribunal. (iv) The order dated April 30, 2019 upholding the order of assessment of 9 Bills of Entry. Accordingly, 9 appeals have been f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith 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 integrated tax under the Exemption Notification for the reason that the importer is required to only pay duty of customs on the fair cost of repairs and the cost of insurance and freight charges, both ways. The Customs Authorities, however, did not agree on this issue with the Appellant, as according to them the Appellant was not entitled to full exemption from integrated tax since the phrase duty of customs at serial no. 2 of the Exemption Notification, includes both the basic customs duty as also integrated tax. Thus, according to the Authorities, the appellant was required to pay integrated tax, in addition to the basic customs duty, on the fair cost of repairs and the cost of insurance and freight charges, both ways. 8. The Commissioner, therefore, disallowed the integrated tax exemption claimed by the Appellant on all the 349 Bills of Entry and integrated tax was levied on the fair cost of repairs and the cost of insurance and freight charges, both ways. It is against the aforesaid assessment of the 349 Bills of En ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... culating 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 shall, notwithstanding anything contained in section 14 of the Customs Act, 1962, be the aggregate of- (a) the value of the imported article determined under sub-section (1) of section 14 of the Customs Act, 1962 or the tariff value of such article fixed under sub-section (2) of that section, as the case may be; and (b) any duty of customs chargeable on that article under section 12 of the Customs Act, 1962, and any sum chargeable on that article under any law for the time being in force as an addition to, and in the same manner as, a duty of customs, but does not include the tax referred to in sub-section (7) or the cess referred to in sub-section. (9) Any article which is imported into India shall, in addition, be liable to the goods and services tax compensation cess at such rate, as is leviable under section 8 of the Goods and Services Tax (Compensation to States) Cess Act, 2017 on a like article on its supply in India, on the value of the imported article as determined under sub-section (10). (11) The duty or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are wholly exempted under the Exemption Notification; (ii) The Exemption Notification has consciously used two different expressions duty of customs and integrated tax at different places in the Notification, and so the same have to be understood differently and one cannot be substituted with the other. In support of this contention, reliance has been placed on the following decisions: (a) Devidayal Electronics & Wires Limited and another versus Union of India and another [1984 (16) ELT 30 (Bom.)]. (b) Commissioner of Trade Tax, U.P. versus S.S. Ayodhya Distillery [2009 (233) ELT 146 (S.C.)]. (c) Union of India versus Kumho Petrochemicals Company Limited [2017 (351) ELT 65(S.C)]. (d) Madhucon Projects Limited versus Cus., Ex. & S.T. SETT. COMM. Chennai[2016 (44) STR 321 (A.P.)]; (iii) A comparison of the Exemption Notification with Customs Notification No. 241 dated November 4, 1982, wherein exemption from payment of basic customs duty and integrated tax has been granted under different circumstances, clearly depicts that integrated tax cannot be included in duty of customs; (iv) A comparison with Customs Notification No. 52/2003 dated March 31, 2003 also indicates t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r substituted. To appreciate this issue, reliance can be placed on the earlier Customs Notification No. 94 of 96. The subsequent Exemption Notification is almost a replica, since after the introduction of Goods and Service Tax, CVD has been replaced by integrated tax; (iii) An assessee cannot pick and choose Notifications to unlawfully enrich himself and if a narrow interpretation is given to the submissions made by the learned Counsel for the Appellant, there will be large revenue implications; and (iv) Though the Exemption Notification is clear, but even if it is assumed that there is any ambiguity, then too the benefit should go the Revenue as was observed by the Supreme Court in Commissioner of Customs (Import) Mumbai versus Dileep Kumar and Company [2018 (361) ELT 577 (S.C)] and in M/s LR Brothers India Overseas Limited vs Commissioner of Central Excise [2020-TIOL-145-SC-CUS]. 15. The submissions advanced by the learned Counsel for the Appellant and the learned Authorised Representatives of the Department have been considered. 16. Section 25 of the Customs Act deals with power to grant exemption from duty. Sub-section (1) of section 25 of the Customs Act is reproduced be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (11) provides that the duty, or tax or cess chargeable under section 3 shall be in addition to any other duty or tax or cess, imposed under the Tariff Act or any other law for the time being in force. Sub-section (12) states that the provision of the Customs Act and the rules and regulations made thereunder, including those relating to exemption from duty shall, so far as may be, apply to the duty or tax or cess, as the case may be, chargeable under section 3 as they apply in relation to the duties leviable under that Act. 19. 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. 20. The Exemption Notification does not define the phrase duty of customs. However, section 2(15) of the Customs Act defines "duty" to mean duty of customs leviable under the Customs Act. The said section 2(15) of the Customs Act is reproduced below: "2(15). "duty" means a duty of customs leviab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Prestige Engineering (India) Limited vs. Collector of C., Excise, Meerut [1994 (73) E.L.T. 497 (S.C)] observed that once an expression is defined in the Act, that expression, wherever it occurs in the Act, Rules or Notifications issued thereunder, should be understood in the same sense. It is for this reason that it has been contended by learned Counsel for the Appellant that the expression "duty of customs" appearing at serial no. 2 of the Exemption Notification can have only that meaning which is assigned to it under section 2(15) of the Customs Act, which would be the "duty" leviable under the Customs Act and any other duty or tax which is not levied under the Customs Act, but levied under other enactments cannot be treated as a "duty of customs" for the purpose of customs notification. 25. It is also relevant to refer to the judgment of the Supreme Court in Collector of Customs, Madras vs. Indian Organic Chemicals Limited [2000 (118) ELT 3 (S.C)]. Section 19 of the Customs Act relates to determination of duty where goods consist of articles liable to different rates of duty. Section 3 of the Tariff Act deals with levy of additional duty equal to excise duty. The Supreme Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Industries vs. Union of India & Others, [2019 (12) TMI 286 -Supreme Court] also needs to be referred to. The Supreme Court held that National Calamity Contingency Duty, Education Cess and Secondary and Higher Education Cess are in the nature of additional excise duty and when an exemption notification exempts duty of excise it would not automatically mean that these additional excise duties are also exempted. Thus, it was held that these additional duties do not come within the scope of the term "duty of excise". 29. 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 collection. It provides that there shall be levied a tax called the integrated goods and services tax on all inter-State supplies of goods or services or both on the value as determined under section 15 of the Central Goods and Services Act and at such rates, not exceeding 40 per cent as may be notified by the Government. The proviso stipulates that the integrated tax on goods imported into India shall be levied and collected in accordance with the prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Thus, what follows from the aforesaid discussion is; (1) Though the expression duty of customs has not been defined under the Exemption Notification but it can only have that meaning which has been assigned to the meaning of 'duty' under section 2(15) of the Customs Act. It would, therefore, mean the "duty of customs" leviable under the Customs Act and any other duty not levied under the Customs Act, would not be duty of customs for the purposes of any Notification issued under the Customs Act. (2) Integrated tax has also not been defined under the Exemption Notification. It has been defined under section 2(12) of the Integrated Tax Act to mean the tax levied under the Integrated Tax Act. Integrated Tax is levied under section 5 of the Integrated Tax Act and not under section 12 of the Customs Act, and therefore, cannot be called as duty of customs; and (3) Section 3 (7) of the Tariff Act only provides the manner of collection of the integrated tax by the customs authorities in case of import of goods. 33. It is in the light of the aforesaid discussion that the meaning assigned to duty of customs in the Exemption Notification has to be understood. 34. A perusal of the mai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... econd Schedules to the Tariff Act and not to integrated tax, which is levied under section 5 of the Integrated Tax Act. 37. This apart, it is also necessary to consider whether omission to add 'specified in the First Schedule' after 'Duty of Customs' in the conditions set out in column (3) of the Table at serial number 2 is deliberate or unintentional. To appreciate this, it would be necessary to examine whether it was at all necessary to add 'leviable thereon which is specified in the said First Schedule' after 'duty of customs' in the main body of the Exemption Notification. As noticed above, even if 'leviable thereon which is specified in the said First Schedule' after 'duty of customs' in the main body of the Exemption Notification, had not been added, it would have necessarily meant duty of customs that is defined under section 2(15) of the Customs Act read with section 12 of the Customs Act and section 2 of the Tariff Act. This in turn, would relate to the First Schedule of the Tariff Act. It, therefore, follows that it is only as a matter of abundant caution and only to make the intention clear beyond any doubt that the main body of the Exemption Notification includes duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no doubt true that in these various notifications referred to above, the Central Government has, while granting exemption under Rule 8(1), used specific language indicating that the exemption, total or partial, granted under each such notification is in respect of excise duty leviable under the Central Excises and Salt Act, 1944. But, merely because, as a matter of drafting, the Central Government has in some notifications specifically referred to the excise duty in respect of which exemption is granted as `duty of excise' leviable under the Central Excises and Salt Act, 1944, it does not follow that in the absence of such words of specificity, the expression `duty of excise' standing by itself must be read as referring to all duties of excise. It is not uncommon to find out that the legislature sometimes, with a view to making its intention clear beyond doubt, uses language ex abundanti cautela though it may not be strictly necessary and even without it the same intention can be spelt out as a matter of judicial construction and this would be more so in case of subordinate legislation by Executive. The officer drafting a particular piece of subordinate legislation in the Executiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the said two words were intended to bear different meanings. The Court, therefore, held that the words "industrial unit" must mean something other than "factory". 41. This judgment of the Bombay High Court in Devidayal Electronics was approved by the Supreme Court in Collector of Central Excise vs. Himalayan Co-op. Milk Product Union Limited [2000 (122) ELT 327 (S.C)]. 42. It would also be pertinent to refer to the decision of the Supreme Court in S. S. Ayodhya Distillery. The issue that arose before the Supreme Court was whether "paddy husk" can be treated as "rice husk". The Supreme Court held that when two expressions have been used in the same Notification, two different meanings should be assigned thereto. The observations are as follows: "11. As paddy and rice are considered to be the separate commodities, paddy husk cannot be treated to be rice husk. Not only in the notification dated 7-9-1981 but also in the notification dated 5-6-1985 paddy husk is not mentioned. By reason of notification dated 6-6-1996 'paddy husk' was inserted. Even then, the rice husk was not deleted. No explanation was offered therefor. Both rice husk and paddy husk, thus, found place in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , one has to construe these different expressions as carrying different meanings." 45. In this connection it would also be relevant to refer to the entries at serial no. 1 of the Exemption Notification. Serial no. 1 specifically refers to what types of duties or taxes are leviable under different situations. There is a specific reference to integrated 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. 46. Learned Authorized Representatives of the Department have placed reliance upon the exemption Notification No. 94/96 dated December 16, 1996. The relevant portion is reproduced below : "Exemption to re-import of goods exported under duty drawback, rebate of duty or under bond - In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962) and in supersession of the Notification of the Government of India in the Ministry of Finance, (Department of Revenue), No. 97/95-Custom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 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. 49. It would, therefore, not be necessary to examine the contention of learned Authorised Representatives of the Department that in case of any ambiguity in an Exemption Notification, the benefit should go to the Revenue. It would also not be necessary to examine the remaining contentions advanced by the learned Counsel for the Appellant that the activity of repairs is "supply of service" or that the said activity would not fall under the category of 'import of service' under the Integrated Tax Act since the necessary ingredients mentioned therein have not been fulfilled. 50. Thus, for all the reasons stated above, it is not possible to sustain the impugned orders upholding the assessments made on the 346 Bills of Entry. The 346 orders passed by the Commissioner (Appeals) are, accordingly, set aside and it is held that the Appellant is entitled to exemption from payment of integrated tax under the Exemption Notification on re-import of repaired parts/ aircrafts into ..... 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