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TMI Blog2025 (5) TMI 1695X X X X Extracts X X X X X X X X Extracts X X X X ..... in the operations of export of Soyabean Meal, an agricultural-commodity falling under Chapter 23 First Schedule to the Customs Tariff Act, 1975 - Chapter 23: Residues and waste from the food industries; prepared animal fodder- of the Custom Tariff Act, 1975, asserts that as a merchant exporter, the entity is entitled to claim duty drawbacks at All-Industry Rate ("AIR") introduced by the Customs Notification No. 81/2006 dt. 13.07.2006 and continued vide annual Notification Nos. 68/2007 dt. 16.07.2007, No. 103/2008 dt. 29.08.2008, No. 84/2010 dt. 17.09.2010. Clause 5 of the Notification no. 81/2006 & 68/2007 and Clause 6 of Notification No. 103/2008 and 84/2010 respectively, are identically worded and state as under: "The figures shown under the drawback rate and drawback cap appearing below the column "Drawback when Cenvat facility has not been availed" refer to the total drawback (customs, central excise and service tax component put together) allowable and those appearing under the column "Drawback when Cenvat facility has been availed" refer to the drawback allowable under the customs component. The difference between the two columns refers to the central excise and service tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dt. 17.09.2010 made it clear that exporters shall be entitled to the custom duties which remained unrebated through the AIR drawback route, clarifying the applicability and operation of previously issued Circulars by the CBEC. Per contra, the Respondents have submitted that the Circular No. 35/2010-Cus. does not have a retrospective effect, and expressly states that the same has been made effective from 20.09.2010. The relevant portion of the CBEC Notification No. 35/2010 dt. 17.09.2010 is reproduced herein as under: "The Ministry has announced the revised All Industry Rates (AIR) of Duty Drawback vide Notification No. 84/2010-Cus. (N.T) dated 17.09.2010. The rates of drawback have been made effective from 20.09.2010. xxx xxxxxx xxxxxxxxx xxxxxxx xxx xxxxxx xxxxxxxxx xxxxxxx (vi) Miscellaneous xxx xxxxxx xxxxxxxxx xxxxxxx xxx xxxxxx xxxxxxxxx xxxxxxx (d) The earlier notification (No. 103/2008 Cus. NT dt. 29.08.2008 as amended) provided that the rates of drawback in the Drawback Schedule would not be applicable to products manufactured or exported by availing the rebate of Central Excise duty paid on materials used in the manufacture of export goods in terms of R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prospective in nature, the question of giving retrospective effect to a statute does not arise. It was argued that the benefit of the Notification could not be extended to the Appellant as the final product was exempted from payment of duty and did not come within the domain of CENVAT Scheme, and rather was covered under clause 8(e) & (f) of the Notification No. 103/2008 whereby the benefit under Rule 19(2) of Central Excise Rules, 2002 had already been availed by the Appellant for the manufacture of the goods. It was argued that the contention of the Appellant that the drawbacks of more than Rs. 11 crores had been withheld was incorrect, as the same was legally inadmissible. 8. The High Court relying upon this assertion of the Respondents dismissed the Writ Petition no. 2576/2012 stating that the Notification dt. 17.09.2010 was not merely to clarify the position or make explicit, an implicit issue in previous notifications and would not be applicable retrospectively as it clearly mentions that the same shall be effective from 20.09.2010. The Review Petition No. 1/2015 filed by the Appellant was also dismissed in limine, vide Order dt. 01.04.2016. Submissions 9. It has been ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the Notification as well as the Circular are prospective in nature. 11. It was argued on behalf of the Respondents that not all beneficial legislations are necessarily retrospective in nature, referring to the decision in Shyam Sunder Vs Ram Kumar Shyam Sunder Vs Ram Kumar [2001] 8 SCC 24. whereby it was held that though the amending Act is a beneficial legislation meant for the general benefit of citizens but there is no such rule of construction that a beneficial legislation is always retrospective in operation, even though such legislation either expressly or by necessary intendment is not made retrospective. Discussion & Analysis 12. We have heard Sh. Arvind Datar, learned Senior Counsel for the Appellant firm and learned counsel for the Respondents at length, and have perused the record. The matter calls for the determination as to whether the Circular No. 35/2010-Cus. Dt. 17.09.2010 for the purposes of claim of custom duty drawbacks for merchant exporters, have retrospective or prospective effect. In the present case, if the Circular is held to be clarificatory, curative and declaratory in nature, its application would be retrospective and would entail the claim of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ogether) allowable and those appearing under the column "Drawback when Cenvat facility has been availed" refer to the drawback allowable under the customs component. The difference between the two columns refer to the central excise and service tax component of drawback. If the rate indicated is the same in both the columns, it shall bean that the same pertains to only customs component and is available irrespective of whether the exporter has availed of Cenvat or not. (6) The figures shown under drawback rate and drawback cap appearing below the column "Drawback when Cenvat facility has not been availed" refer to the total drawback (customs, central excise and service tax component put together) allowable and those appearing under the column "Drawback when Cenvat facility has been availed" refer to the drawback allowable under the customs component. The difference between the two columns refer to the central excise and service tax component of drawback. If the rate indicated is the same in both the columns, it shall bean that the same pertains to only customs component and is available irrespective of whether the exporter has availed of Cenvat or not. (6) The figures shown und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exported in terms of sub-rule (2) of rule 19 of the Central Excise Rules, 2002; (iii) The Circular does not vest any fresh rights on merchant exporters or casts upon any burden on the Department except the one already cast upon them vide previous Notifications. 14. Even otherwise, a threadbare analysis of the nature and substance of the CBEC Circular No. 35/2010-Cus. dt. 17.09.2010, would firstly make it evident that there is no substantive modification and amendment to the previous CBEC Notifications. The language of the Circular does not expand or alter the scope of the previous Notifications, but cements the claim of the merchant exporters, who were entitled to receive the benefit of AIR customs duty drawback since 2007. The Circular dt. 17.09.2010 per se clarifies and makes it explicit that the customs duties which remained unrebated to the concerned manufacturers, should be provided through the AIR drawback route, with or without the rebate of Central Excise Duties at the time of processing in terms of Rule 18 or 19 of the Central Excise Rules, 2002. 15. Having regard to the concerned Circular dt. 17.09.2010 vis-à-vis the previous Notifications, no new right or ben ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions already in operation, did not confer a prospective benefit on antecedent facts, but established the scope of the very benefit introduced vide the first Notification No. 81/2006 dt. 13.07.2006 for the sake of the Appellant and such similarly placed exporters. For this simple reason, the operation of the said CBEC Circular dt. 17.09.2010 ought to be retrospective. 18. It may be argued by the Department that not every beneficial legislation is intended to be retrospective in nature; however, the retrospectivity of a statute is to be tested on the anvil of the doctrine of "fairness". The substratum of a beneficial legislation is to ensure that the benefit is uniform and absolute, which may be prospective in nature, but when such benefit to one person does not inflict any undue burden on the other, the purposive construction can be considered to be given a retrospective effect CIT vs Vatika Township (P) Ltd. [2015] 1 SCC 1 & Vijay Vs State of Maharashtra [2006] 6 SCC 289. It is therefore pertinent to clarify that except in cases where such enactments or issuance of Circulars are arbitrary, vexatious or constitute a parallel mechanism making its operation unfair, the Courts need no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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