Per contra, the respondent would urge that in the fact situation of the present case, the department has correctly levied the customs duty, as the DTA sales made were in contravention of the EXIM policy and the appellant had no permission from the Development Commissioner to clear the goods in DTA. The respondent further urged that the amendment seeks to bring about a substantive change, whilst pointing out that the CBEC Circular in its opening paragraph speaks about “carrying out” the amendment. Further, the amendment must be applied prospectively. Reliance is placed upon the decision of this Court in Union of India & Anr. vs. IndusInd Bank Limited & Anr. , wherein it has been held that if the provision is remedial in nature, it cannot be construed as clarificatory or declaratory and has to be applied prospectively.[Para No.8]
The issues that arise for consideration in this appeal are: (i) Whether customs duty can be charged on the nonexcisable goods produced in India and sold in DTA by an EOU?; and (ii) Whether the amendment in terms of Notification No. 56/01Cus dated 18.05.2001, purporting to amend the criteria for determination of duty on inputs, is prospective or retrospective in its application?[Para No.10]
Moving to the second question, the show cause notice was issued to the appellant prior to the issuance of the amendment notification. In this backdrop, let us now examine the contention of the appellant that the amendment notification being retrospective in its application. The relevant portion of the said notification is reproduced hereunder:
“NOTIFICATION NO. 56 /2001CUS DATED 18.5.2001 In exercise of the powers conferred by subsection (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government being satisfied that it is necessary in the public interest so to do, hereby directs that each of the notifications of the Government of India in the Ministry of Finance (Department of Revenue), specified in column (2) of the Table hereto annexed shall be amended or further amended, as the case may be, in the manner specified in the corresponding entry in column (3) of the said Table.
TABLE Sr.No Notification No. Amendment and Date (1) (2) (3) xxx Xxx xxx
8. 126/94Cus In the said notification, dated the 3rd June, 1994
(a) in the first paragraph, in condition (6), after clause (d), the following shall be inserted, namely: " (e) permit destruction of rejects and waste without payment of duty within the unit, or outside the said unit, where it is not possible or permissible to destroy the same within the said unit, in the presence of Customs or Central Excise officer.";
(b) in paragraph 2, in the proviso, for the words and figures "duty of 15% ad valorem", the words and figure "duty of 5% ad valorem" shall be substituted;
(c) in paragraph 3, in clause
(a), for the words "on payment of customs duty on the said goods used for the purpose of production, manufacture or packaging of such articles in an amount equal to the customs duty leviable on such articles as if imported as such.", the following shall be substituted, namely: "customs duty equal in amount to that leviable on inputs obtained under this notification and used for the purpose of production, manufacture or packaging of such articles, which would have been paid, but for the exemption under this notification, shall be payable at the time of clearance of such articles......[Para No.23]
Supreme Court of India
M/S. L.R.Brothers
Vs.
Comissioner Of Central Excise
Decided on 01/09/2020