Amendment Notification 36/2021 cannot have retrospective effect from 2017 under Section 25(4) Customs Act

CESTAT New Delhi held that Amendment Notification 36/2021-Customs dated 19.07.2021, which amended Exemption Notification 45/2017-Customs, cannot have retrospective effect from 30.06.2017. The tribunal ruled that under Section 25(4) of the Customs Act, notifications come into force on their issue date unless specifically stated otherwise. Since the Amendment Notification contained no retrospective provision, it became effective only from 19.07.2021. The Commissioner (Appeals) order was set aside and appeal was allowed.

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The core issue considered in these appeals was whether the Amendment Notification No. 36/2021-Customs, dated 19.07.2021, issued under section 25(1) of the Customs Act, 1962, amending Notification No. 45/2017-Customs dated 30.06.2017, has retrospective effect from the date the Exemption Notification was issued on 30.06.2017.

The legal framework involved includes section 25(1) of the Customs Act, which empowers the Central Government to grant exemptions from customs duties. The Exemption Notification dated 30.06.2017 exempted certain goods from customs duties and integrated tax upon re-importation after repairs. The Tribunal's prior decision in InterGlobe Aviation Ltd. vs. Commissioner of Customs clarified that "duty of customs" in the Notification did not include integrated tax, leading to the issuance of the Amendment Notification in 2021 to address this interpretation.

The Court's reasoning focused on whether the Amendment Notification could be considered clarificatory and thus retrospective. The Tribunal analyzed the language of the Amendment Notification, which did not explicitly state it was retrospective. Section 25(4) of the Customs Act specifies that a notification comes into force on its issue date unless stated otherwise. The Tribunal found no such retrospective stipulation in the Amendment Notification.

Key evidence included the Tribunal's previous decision in InterGlobe Aviation, which interpreted the original Exemption Notification as not including integrated tax in "duty of customs." The Amendment Notification introduced the phrase "Said duty, tax or cess," suggesting a substantive change rather than a clarification.

The Tribunal applied the law to the facts by comparing the pre-amendment and post-amendment scenarios. It concluded that the Amendment Notification imposed a new liability for integrated tax, which was not present before, indicating a substantive change rather than a clarificatory one.

Competing arguments included the appellant's claim that the Amendment Notification was substantive and not retrospective, while the respondent argued it was clarificatory and thus retrospective. The Tribunal sided with the appellant, emphasizing the absence of explicit retrospective language in the Amendment Notification.

Significant holdings included the Tribunal's determination that the Amendment Notification could not be applied retrospectively. The Tribunal emphasized that a provision cannot be deemed clarificatory merely because it uses terms like "for removal of doubts" if it introduces new liabilities. The Tribunal's final determination was that the Amendment Notification dated 19.07.2021 is not retrospective, setting aside the impugned orders and allowing all appeals.

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