TaxTMI 
TaxTMI 
2017 (11) TMI 494
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....s the same under the Duty Free Import Authorisation Scheme (DFIA) under para 4.4.1 and 4.4.2 of the Foreign Trade Policy read with Notification No.40 of 2006 Cus dated 1.5.2016. The Petitioner, a transferee of DFIA, purchased the scrips and utilised the same for discharging duty liability against various Bills of Entry under Notification No.40 of 2006 and 17 of 2009 dated 19.2.2009. Show cause notices were issued by the Additional Commissioner Of Customs dated 11.1.2011 calling upon the petitioner to show cause why additional duty along with interest from the date of clearance not be recovered from it on the materials imported under various bills of entry as per Notification 40 of 2006 as amended by condition (iiia) of Notification No.17 of 2009 Customs along with penalty under section 114-A of the Customs Act 1962. 3. The basis of the show cause notice was that the petitioner had not declared at the time of clearance of the goods, the fact that CENVAT credit had been availed of by the original licence holders, Virgo Polymers (I) Pvt. Ltd, Big Bags India Pvt. Ltd., (BBI) Bangalore and others. Since there had been no declaration as called for in terms of clause (iii) of Notificatio....
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....d counsel for the petitioner would, at the start of the hearing, restrict the challenge solely to the retrospective operation of Notification 17 of 2009 advancing arguments only on this aspect of the matter. This order thus, considers and disposes the said arguments in deciding the question of retrospectivity of Notification 17 of 2009 dated 19.02.2009. 6. The DFIA Scheme came into force on 1.4.2006 and Exemption Notification No.40 of 2006-cus dated 1.5.2006 was issued containing a condition that barred the benefit of the Notification to exporters who had availed CENVAT credit on inputs procured against authorisation. The bar was solely in respect of imported goods. Thus, an exporter availing CENVAT credit on inputs procured indigenously could still avail of the benefit of the notification. 7. On 1.4.2007, an amendment was made to the Foreign Trade Policy requiring the transferees of DFIA to remit additional duty of customs and avail CENVAT credit thereupon in cases where CENVAT credit had been availed on inputs. This policy was not immediately given effect to and clearances were being effected in terms of Notification 40 of 2006 dated 1.5.2006. 8. It was only on 19.2.2009 that ....
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....the petitioner, Mr.V.Sundareswaran, learned counsel for the 1st respondent and Mr.S.Rajasekar, learned counsel for respondents 2 and 3. 13. The Foreign Trade Policy for the period 2004 2009 extended a duty free import authorisation allowing duty free imports of inputs used in the manufacture of products for export. The scheme came into force from 01.05.2006. Para 4.4.7 of the scheme as it originally stood stipulated that CENVAT Credit Facility was available for the inputs either imported or procured indigenously against the DFIA. While this is so, an amendment was brought in vide Finance No.2, Finance Act (2) dated 19.08.2009 as per which DFIAs issued between the period 01.05.2006 to 31.03.2007 attracted payment of additional customs duty/excise duty with effect from 01.05.2006 if the additional condition set out in the proviso (extracted below) was not complied with. The text of the Amendment Notification reads thus: Duty Free Import Authorisation Amendment to Notification No.40/2006-Cus. In exercise of the powers conferred by sub-section (1) of Section 25 of the Customs Act, 1962 (52 of 1962), the Central Government being satisfied that is necessary in the public interest so....
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....f customs so paid shall be eligible for availing CENVAT Credit under the CENVAT Credit Rules , 2004; (iiib)that in respect of imports made after the discharge of export obligation in full, and it facility under rule 18 (rebate of duty paid on materials used in the manufacture of resultant product) or sub-rule 2 of rule 19 of the Central Excise Rules, 2002 or CENVAT credit under CENVAT Credit Rules, 2004 has not been availed and the importer furnishes proof to this effect to the satisfaction of the Deputy Commissioner of Customs or the Assistant Commissioner of Customs as the case may be, then the imported materials may be cleared without furnishing a bond specified in condition (iiia);" (2)in condition (iv), for the words, figures, letters and brackets Special Economic Zone as specified in the notification issued under Section 76A of the Customs Act, 1962 (52 of 1962) the following words, figures and brackets shall be substituted, namely:- "a Special Economic Zone notified under Section 4 of the Special Economic Zones Act, 2005 (28 of 2005)". (3)for condition number (v), the following condition shall be substituted, namely:- "(v)that the export obligation as specified in ....
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....dment. The Explanation does not however, provide for the penalties and confiscation of goods. It is the contention of the appellants that as the appellants had not complied with the requirements of the amended rules 9 and 49, they would be subjected to penalties and their goods would be confiscated under the amended rules 9 and 49 read with rule 173Q of the Rules with retrospective effect. It is, accordingly, submitted on behalf of the appellants that the amendment of these two rules with retrospective effect is arbitrary and unreasonable and should be struck down as violative of Article 14 of the Constitution. 36. Attractive though the argument is, we regret we are unable to accept the same. It is true that the Explanation to section 51 has not mentioned anything about the penalties and confiscation of goods but we do not think that in view of such non-mention in the Explanation excluding imposition of penalties for acts or omissions before amendment. such penalties can be imposed or goods can be confiscated by virtue of the amended provision of Rules 9 and 49. It will be against all principles of legal jurisprudence to impose a penalty on a person or to confiscate his goods for....
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....ing observation extracted from the latter judgement: '11. Now it is a well-settled rule of interpretation hallowed by time and sanctified by judicial decisions that, unless the terms of a statute expressly so provide or necessarily require it, retrospective operation should not be given to a statute so as to take away or impair an existing right or create a new obligation or impose a new liability otherwise than as regards matters of procedure. The general rule as stated by Halsbury in Vol.36 of the Laws of England (3rd Edn.) and reiterated in several decisions of this Court as well as English courts is that 'all statutes other than those which are merely declaratory or which relate only to matters of procedure or of evidence are prima facie propsective and retrospective operation should not be given to a statute so as to affect, alter or destroy an existing right or creat a new liability or obligation unless that effect cannot be avoided without doing violence to the language of the enactment. If the enactment is expressed in language which is fairly capable of either interpretation, it ought to be construed as prospective only.'" 19. Applied to the present case....
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....iples. Suffice it to quote from one of such judgments of this Court in Commissioner of Sales Tax Commissioner, Uttar Pradesh v. Modi Sugar Mills, 1961 (2) SCR 189 at 198:- "In interpreting a taxing statute, equitable considerations are entirely out of place. Nor can taxing statutes be interpreted on any presumptions or assumptions. The court must look squarely at the words of the statute and interpret them. It must interpret a taxing statute in the light of what is clearly expressed; it cannot imply anything which is not expressed; it cannot import provisions in the statute so as to supply any assumed deficiency." 22. The judgment of the Supreme Court in J.K. Cotton Spinning and Weaving Mills Ltd (supra) relied upon heavily by Mr. Saravanan were sought to be distinguished by Mr.Sundareswaran by reference to the decisions of the Supreme Court in R C Tobacco (supra) as follows: 'In J.K. Cotton Spinning & Weaving Mills Ltd. vs. Union of India (1987) Supp. SCC 350 relied upon by the petitioners, by virtue of the retrospective amendment of Rules 9 and 49 of the Central Excise Rules in 1982, commodities obtained at an intermediate stage of manufacture in a continuous process wer....