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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 ..... nbsp;51882/2022, 51902/2022, 51922/2022, 51803/2022, 51823/2022, 51843/2022, 51863/2022, 51883/2022, 51903/2022, 51923/2022, 51804/2022, 51824/2022, 51844/2022, 51864/2022, 51884/2022, 51904/2022, 51924/2022, 51805/2022, 51825/2022, 51845/2022, 51865/2022, 51885/2022, 51905/2022, 51925/2022, 51806/2022, 51826/2022, 51846/2022, 51866/2022, 51886/2022, 51906/2022, 51926/2022, 51807/2022, 51827/2022, 51847/2022, 51867/2022, 51887/2022, 51907/2022, 51927/2022, 51808/2022, 51828/2022, 51848/2022, 51868/2022, 51888/2022, 51908/2022, 51928/2022, 51809/2022, 51829/2022, 51849/2022, 51869/2022, 51889/2022, 51909/2022, 52221/2022, 51810/2022, 51830/2022, 51850/2022, 51870/2022, 51890/2022, 51910/2022, 51811/2022, 51831/2022, 51851/2022, 51871/2022, 51891/2022, 51911/2022, 51812/2022, 51832/2022, 51852/2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... G.S.T.L. 410 (Tri. - Del.)] after referring to sections 2(15), 12(1) of the Customs Act and sub-sections (1), (7) and (9) of section 3 of the Customs Tariff Act, 1975 [The Tariff Act] and to the judgments of the Supreme Court in Prestige Engineering (India) Limited vs. Collector of C., Excise, Meerut [1994 (73) E.L.T. 497 (S.C.)] Collector of Customs, Madras vs. Indian Organic Chemicals Limited [2000 (118) E.L.T. 3 (S.C.)] and M/s. Unicorn Industries vs. Union of India and others [2019 (370) E.L.T. 3 (S.C.)] and the judgment of the Bombay High Court in Ceat Tyres of India Limited vs. Union of India [1992 (57) E.L.T. 221 (Bom.)] observed: (i) 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; (ii) Integrated tax has also not been defined under the Exemption Notification. It has been defined und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 payable and integrated tax and compensation cess are wholly exempted." (emphasis supplied) 6. The appeals were allowed by the Tribunal by a decision dated 02.11.2020 and the operative part of the order is reproduced below: "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 India. All the 346 Appeals are, therefore, allowed." (emphasis supplied) 7. The aforesaid decision of the Tribunal led to the issue of the Amendment Notification dated 19.07.2021 under section 25(1) of the Customs Act. 8. It would, therefore, be appropriate to reproduce this Amendment Notification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or repairs attracts integrated tax and cess. The Circular provides that the clarifictory amendment was being issued to give effect to the recommendations made by the GST Council. It would be appropriate to reproduce the said Circular dated 19.07.2021 and it is as follows: "Circular No. 16/2021-Customs ***** Government of India Ministry of Finance Department of Revenue (Central Board of Indirect Taxes & Customs) ***** New Delhi, dated 19th July, 2021 ***** Subject: Clarification regarding applicability of IGST on repair cost, insurance and freight, on goods re-imported after being exported for repairs, on the recommendations of the GST Council made in its 43rd meeting - reg. References have been received seeking clarification on the issues of the applicability of IGST on repair cost, insurance and freight, on goods re-imported after being exported abroad for repairs. 2. Notification Nos. 45/2017-Customs and 46/2017Customs, both dated 30th June, 2017, issued at the time of implementation of GST, prescribe certain concession from duty/taxes on reimport of goods exported for repair outside India. These notifications, specifically serial No. 2 ibid, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onents 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 reimported after repair from outside India attract IGST on the repair, freight and insurance value. In the said discussion, the IGST levied on such goods re-imported after being exported abroad for repairs was a significant factor considered by the GST Council while deciding the rate on MRO services. The above deliberations of the GST Council leave no doubt that the Council had consciously recommended for levy of IGST and cess, albeit at the repair, insurance and freight cost instead of the entire value of goods imports, on the basis of which the said notifications No. 45/2017-Cus and 46/2017Cus were issued. 6. Recently, in the matter of M/s Interglobe Aviation Limited versus Commissioner of Customs, in its Final Order Nos. 51226-51571/2020 dated the 2nd November, 2020 {2020 (43) G.S.T.L. 410 (Tri. - Del.)}, the Hon'ble CESTAT Principal Bench, New Delhi on analysis of notification No. 45/2017-Customs, has interpreted that intention of legislation was only to impose basic customs duty on the fair cost of repair cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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 of Customs; Spice Jet Limited vs. Commissioner of Customs (General), New Delhi [2021 (1) TMI 663 - CESTAT New Delhi] ; Jet Airways India Ltd. vs. Commissioner of Customs (Import), Mumbai [2021 (2) TMI 1113 - CESTAT Mumbai] ; M/s. Jet Airways (India) Ltd. vs. Commissioner of Customs (Air Cargo) [2021 (9) TMI 1134 - CESTAT Chennai]; and Jet Airways (India) Ltd. vs. Commissioner of Customs [2021 (1) TMI 577 - CESTAT New Delhi]; (ii) The amendments made in Exemption Notification dated 30.06.2017 by the Amendment Notification dated 19.07.2021 are substantive amendments, which cannot be said to have retrospective operation; (iii) Retrospective amendments can be carried out only under section 25(2A) of the Customs Act; (iv) If a statute has conferred a power to do an act and has also laid down the method in which that power has to be exercised, it necessarily prohibits the doing of the said act in any other manner than that which has been prescribe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stant 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: (i) The Exemption Notification dated 30.06.2017 refers to 'duty of customs' and not 'duty of customs leviable under the First Schedule' and, therefore, 'duty of customs' would include basic customs duty and integrated tax; (ii) Integrated tax is not a duty of customs levible under the Customs Act, but is levied on import of goods under the Tariff Act; (iii) In clause (ii) of the Amendment Notification, it has been provided that the words 'duty of customs' shall be substituted by 'Said duty, tax or cess' and, therefore, it would have retrospective effect from the date the Exemption Notification was issued on 30.06.2017. In support of this contention, reliance has been placed on the judgment of the Supreme Court in Government of India vs. Indian Tobacco Association [2005 (187) E.L.T. 162 (S.C.)] ; the decision of the Tribunal in Principal Commissioner of CGST vs. M/s. OM Fragrances [Excise Appeal No. 51718 of 2018 decided on 29.09.2022]; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rGlobe 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 and Second Schedules to the Tariff Act and not to integrated tax, which is levied under section 5 of the Integrated Tax Act. 16. The aforesaid decision of the Tribunal in InterGlobe Aviation resulted in the issuance of the Amendment Notification dated 19.07.2021 by the Central Government. This Amendment Notification specifically mentions that it was being issued under section 25(1) of the Customs Act. As noticed above, two amendments were made; the first amendment is that against serial numbers 2 and 3, in column (3), for the words 'Duty of customs', the words 'Said duty, tax or cess' be substituted; and the second amendment is by way of insertion of clause (d) in the Explanation, which provides that on recommendation of the GST Council for removal of doubt, it is clarified that the goods mentioned at serial numbers 2 and 3 of the Table, are leviable to integrated tax and cess, and the exemption, under said serial numbers, is only fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nation, 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 provision sought to added cannot be presumed to be clarificatory merely because the provision attached to Notification bears the nomenclature such as 'it is clarified' or 'for the removal of doubts'. It has to be determined, in each case, whether the provision is clarificatory, basis the test laid down by the Courts. 36. In the present case, the Exemption Notification, before its amendment on 19.07.2019, provided for payment of 'duty of customs' on the repair value of the re-imported goods. The Tribunal, in the decision rendered on 02.11.2020 in InterGlobe Aviation, held in very clear terms that the phrase 'duty of customs' referred to in the condition against serial number 2 would not include integrated tax. By the Amendment Notification dated 19.07.2021, the phrase 'duty of customs' has been substituted with the phrase 'Said duty, tax or cess'. The effect of the amendment would be that basic cus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 orders impugned in all the 1714 appeals are, therefore, set aside and all the appeals are allowed." (emphasis supplied) 21. For the reasons stated by the Division Bench of the Tribunal in InterGlobe Aviation Limited decided on 05.08.2024, it has to be held that 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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