TMI Blog2021 (1) TMI 663X X X X Extracts X X X X X X X X Extracts X X X X ..... Integrated Tax Act and not section 3(7) of the Tariff Act. Section 3 (7) of the Tariff Act only provides for the manner of collection of the said integrated tax to be done by the Customs Authorities in case of import of goods 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 - It would be seen that the aforesaid Notification refers to the duties of customs leviable thereon which is specified in the said first schedule, the additional duty leviable thereon under section 3 of the Tariff Act and special duty of customs leviable under section 68(1) of the Finance Act, whereas the instant Exemption Notification refers to duty of customs leviable thereon which is specified in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 019, 51457 of 2019, 51458 of 2019, 51459 of 2019, 51460 of 2019, 51461 of 2019, 52434 of 2019, 52435 of 2019, 52436 of 2019, 52437 of 2019, 52438 of 2019, 52439 of 2019, 52440 of 2019, 52441 of 2019, 52442 of 2019, 52443 of 2019, 52444 of 2019, 52445 of 2019, 52446 of 2019 ORDER All these 61 appeals have been filed by M/s Spice Jet Limited [ the Appellant ]. The issue raised in all these appeals is about the availability of Integrated Goods and Service Tax [the Integrated Tax] exemption provided at serial no. 2 in the General Exemption Notification No. 45/2017 dated June 30, 2017 [the Exemption Notification ], as amended by Corrigendum Notification dated July 22, 2017, to aircrafts and parts thereof that are re-imported into India after repairs. The Appeals seek the quashing of the 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). 2. It needs to be noted that 10 out of these 61 appeals have been filed by the appellant to assail the orders passed by the Commissioner (Appeals) that have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere is no dispute in these appeals with 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 payment of 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 payment of 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. 7. The Commissioner, therefore, disallowed the integrated tax exemption claimed by the Appellant on all the 58 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntegrated 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 tax or cess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion clearly denotes that what is payable in terms of serial no. 2 is the duty of customs on the fair cost of repairs carried out including to and fro freight charges. All the other duties / taxes, including integrated tax and compensation cess, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly, ( not duty of customs leviable thereon which is specified in the said First Schedule), which fact has to be given due weightage to appreciate the true intention behind the Exemption Notification; (ii) Duty of customs and duty of customs specified in the First Schedule are two separate terms with distinct connotations and cannot be equated or 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 Brother ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liable to integrated tax at such rate, not exceeding 40 per cent as is leviable under section 5 of the Integrated Goods and Services Tax Act [ Integrated Tax Act ] on the value of the imported article. Sub-section (9) provides that any article which is imported into India shall, in addition, be liable to goods and services tax compensation cess on the value of the imported articles. Sub-section (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. 18. 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 cos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efer to duties of customs . It only provides for levy of additional duty equal to the excise duty, sales tax, local taxes and other charges. Additional duty is levied under section 3(1) of the Tariff Act, whereas integrated tax and compensation cess are levied under sub-sections (7) and (9) of section 3 of the Tariff Act. Sub-section (11) of section 3 also refers to duty or tax or cess chargeable under section 3. 23. The Supreme Court 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ms covers only basic customs duty and not additional or auxiliary duty. The Kerala High Court has taken the same view. A special Leave Petition was filed before the Supreme Court against this judgment of the Kerala High Court and it was dismissed by order dated 12 th September, 1984 in SLP (C) 16629/44, M/s Kathayee Cotton Mills Ltd. vs. Union of India. This point must, therefore, be decided against the petitioners. (emphasis supplied) 27. In this connection, the judgment of the Supreme Court in M/s Unicorn 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 . 28. Integrated Tax has been defined under section 2(12) of the Integrated Tax Act to mean the integrated goods and services tax l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emption Notification. As integrated tax is not levied under section 12 of the Customs Act, it cannot be called duty of customs . The charging section for integrated tax, in terms of which it is levied, is section 5 of the Integrated Tax Act and not section 3(7) of the Tariff Act. Section 3 (7) of the Tariff Act only provides for the manner of collection of the said integrated tax to be done by the Customs Authorities in case of import of goods. This is what was observed by the Madras High Court in Vedanta limited vs. Union of India [ 2018 (19) GSTL 637 (Mad.) ] . 31. 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 defin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... leviable under the Customs Act. It is section 12 of the Customs Act which provides that the duties of customs shall be levied at such rates as may be specified under the Tariff Act. Section 2 of the Tariff Act also provides that the rates at which duty of customs shall be levied under the Customs Act are specified in the First and Second Schedules to the Tariff Act. It, therefore, inevitably follows that the expression duty of customs occurring in the column (3) of the Table at serial no. (2) 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. 36. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xpression duty of excise was intended to refer to all duties of excise, including the special auxiliary duties of excise. The Supreme Court emphasised that the expression duty of excise has to be interpreted bearing in mind the context in which it occurs. The Supreme Court, therefore, concluded that the expression duty of excise must bear the same meaning which it has in Rule 8(1), which is excise duty payable under Central Excises and Salt Act, 1944 and cannot bear an extended meaning so as to include special excise duty and auxiliary excise duty. The relevant paragraph of the judgment is reproduced below: 9....................... Now, it is 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 le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied 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. 39. It would, therefore, be appropriate to refer to the judgment of Bombay High Court in Devidayal Electronics. The Bombay High Court held that since the Notification used the word factory and also the word industrial unit in the same Notification, it has to be assumed that 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 . 40. 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) ] . 41. It would also be pertinent to refer to the decision of the Supreme Court in S. S. Ayodhya Distiller ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that two different expressions in a statute must be construed to carry different meanings and the observations are as follows: IX. Two Different expressions in a statue must be construed to carry different meanings: 49. As Parliament has used two different expressions in the Explanation to two distinct provisions, this Court cannot presume the effect of both the Explanations to be the same. If both the Explanations were meant to have the same effect, and to have retrospective application, it was unnecessary for Parliament to use two different expressions in the Explanations to Section 32K(1) and Section 32-O(1)(i) of the Act, as use of the same words would have sufficed. When two different expressions are used by the same statute, one has to construe these different expressions as carrying different meanings. 44. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chedule, the additional duty leviable thereon under section 3 of the Tariff Act and special duty of customs leviable under section 68(1) of the Finance Act, whereas the instant Exemption Notification refers to duty of customs leviable thereon which is specified in the said First Schedule and the integrated tax, compensation cess leviable thereon respectively under sub-sections (7) and (9) of section 3 of the Tariff Act. Thus, the additional duty leviable thereon under Section 3 of the Tariff Act and special duty of customs leviable under section 68(1) of the Finance Act have been replaced by the integrated tax under section 3(7) and compensation cess under section 3(9) of the Tariff Act. It cannot, therefore, be contended that duty of customs referred to in the condition against serial no. 2 of the Exemption Notification would include integrated tax. 47. 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 Exemption Notification would mean that only the basic customs duty on the fair cost of repair charges, freight and insurance charges are paya ..... X X X X Extracts X X X X X X X X Extracts X X X X
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