2008 (10) TMI 404 - AT - Customs

Court grants appeal on retrospective effect of customs notification clarification

The court allowed the appeal by M/s. IEE Engg. Enterprisers Private Limited regarding the denial of exemption under Notification No. 25/99-Cus. for ... Biaxially Oriented Polypropylene Issues involved: The dispute revolves around the retrospective or prospective effect of an Explanation added to a customs notification regarding the inclusion of BOPP film under a specific entry.Summary:1. The appeal was filed by M/s. IEE Engg. Enterprisers Private Limited challenging the denial of exemption under Notification No. 25/99-Cus. for two consignments of plastic film imported by them. The goods were declared as BOPP film but were assessed at a concessional rate applicable to plain plastic films under Sl. No. 44 of the notification.2. An audit objection led to a Show Cause Notice demanding recovery of the exemption availed. The Commissioner (Appeals) found that BOPP film was included under Sl. No. 44 only with the introduction of an Explanation via Notification No. 20/01. The key issue was whether this Explanation had only prospective effect.3. The appellant argued that the Explanation was meant to clarify the scope of the entry and should apply from the date of the original notification. Citing relevant case law, the appellant contended that the Explanation did not alter the Notification's scope but provided clarity to its language.4. The legal representative for the respondent defended the impugned order.5. After considering both sides' submissions, it was determined that the Explanation was introduced to clarify the position applicable to the original notification from its date of issue. The clarification did not operate solely from the date of the subsequent Notification No. 20/01.6. Referring to precedent, it was noted that clarificatory notifications have retrospective effect, as they clarify what was implicit. The Explanation in this case was intended to remove doubts and was deemed to have retrospective effect. The appeal was allowed based on this interpretation.