AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2021 (1) TMI 577
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....8, 54107 of 2018, 54108 of 2018, 54109 of 2018, 54110 of 2018, 54111 of 2018, 54112 of 2018, 54113 of 2018, 54114 of 2018, 54115 of 2018, 54116 of 2018, 54117 of 2018, 54118 of 2018, 54119 of 2018, 54120 of 2018, 54121 of 2018, 54122 of 2018, 54123 of 2018, 54124 of 2018, 54125 of 2018, 54126 of 2018, 54127 of 2018, 54128 of 2018, 54129 of 2018, 54130 of 2018 ORDER All these 60 appeals have been filed by M/s Jet Airways (India) Limited [the Appellant] . The issue raised in all these appeals is about the availability of Integrated Goods and Service Tax [the Integrated Tax] exemption provided at serial no. 2 in the General Exemption Notification No. 45/2017 dated June 30, 2017[the Exemption Notification] , as amended by Corrigendum Notification dated July 22, 2017, to aircrafts and parts thereof that are re-imported into India after repairs. The Appeals seek the quashing of the order dated September 12, 2018 passed by the Commissioner of Customs (Appeals)[the Commissioner] that upholds the orders of assessment of Bills of Entry,....
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.... the integrated tax exemption claimed by the Appellant on all the Bills of Entry and integrated tax was levied on the fair cost of repairs and the cost of insurance and freight charges, both ways. It is against the aforesaid assessment that the Appellant had filed appeals before the Commissioner (Appeals). The Commissioner (Appeals) upheld the assessments and, accordingly, rejected all the appeals. 5. To appreciate the contentions advanced by Shri Tarun Kumar Govil, learned Counsel appearing for the Appellant and Shri Sunil Kumar, learned Authorised Representative of the Department, it is necessary to examine certain sections of The Customs Tariff Act 1975 [the Tariff Act] and the Exemption Notification that are relevant for the purpose of deciding these appeals. 6. Section 2 of the Tariff Act provides that the rates at which duties of customs shall be levied under the Customs Act 1962 [the Customs Act] have been specified in the First and Second Schedules. It is reproduced below: 2. Duties specified in the Schedules to be levied. "The rates at which duties of customs shall be levied und....
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...., be liable to the goods and services tax compensation cess at such rate, as is leviable under section 8 of the Goods and Services Tax (Compensation to States) Cess Act, 2017 on a like article on its supply in India, on the value of the imported article as determined under sub-section (10). (11) The duty or tax or cess, as the case may be, chargeable under this section shall be in addition to any other duty or tax or cess, as the case may be, imposed under this Act or under any other law for the time being in force. (12) The provisions of the Customs Act, 1962 (52 of 1962) and the rules and regulations made thereunder, including those relating to drawbacks, refunds and exemption from duties shall, so far as may be, apply to the duty or tax or cess, as the case may be, chargeable under this section as they apply in relation to the duties leviable under that Act." 8. The relevant portions of the Exemption Notification are reproduced below: "In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962) the Central Government, on being satisfied that it is necessary in the public interest so t....
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....(S.C)] (d) Madhucon Projects Limited versus Cus., Ex. & S.T. SETT. COMM. Chennai [2016 (44) STR 321 (A.P.)] ; (iii) A comparison of the Exemption Notification with Customs Notification No. 241 dated November 4, 1982, wherein exemption from payment of basic customs duty and integrated tax have been granted under different circumstances, clearly depicts that integrated tax cannot be included in duty of customs; (iv) A comparison with Customs Notification No. 52/2003 dated March 31, 2003 also indicates that integrated tax cannot be included in duty of customs. The Central Government, through various amending notifications, specifically provided for inclusion of integrated tax, wherever it deemed fit, post the introduction of Goods and Service Tax regime; (v) Where the language of any Notification is unambiguous, the plain meaning has to be assigned to such unambiguous language; (vi) Integrated tax is not a duty of customs and, therefore aircrafts/ parts on re-import after repairs overseas are eligible for full exemption from integrated tax under the Exemption Notification; (vii) Integrated Tax is levie....
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....e Exemption Notification is clear, but even if it is assumed that there is any ambiguity, then too the benefit should go the Revenue as was observed by the Supreme Court in Commissioner of Customs (Import) Mumbai versus Dileep Kumar and Company [2018 (361) ELT 577 (S.C)] and in M/s LR Brothers India Overseas Limited [2020-TIOL-145-SC-CUS]. 11. The submissions advanced by the learned Counsel for the Appellant and the learned Authorised Representatives of the Department have been considered. 12. Section 25 of the Customs Act deals with power to grant exemption from duty. Sub-section (1) of section 25 of the Customs Act is reproduced below: "25. Power to grant exemption from duty.- (1) If the Central Government is satisfied that it is necessary in the public interest so to do, it may, by notification in the Official Gazette, exempt generally either absolutely or subject to such conditions (to be fulfilled before or after clearance) as may be specified in the notification goods of any specified description from the whole or any part of duty of customs leviable thereon." (2) xxxxxx 13. It is in exercise of the p....
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....n 3 as they apply in relation to the duties leviable under that Act. 15. There is no dispute that it is serial no. 2 of the Exemption Notification that is applicable to aircrafts/ parts re-imported into India after repairs. What would, therefore, be payable in terms of serial no. 2 would be the duty of customs on the fair cost of repairs carried out including cost of materials used in repairs, insurance and freight charges, both ways. 16. The Exemption Notification does not define the phrase duty of customs. However, section 2(15) of the Customs Act defines "duty" to mean duty of customs leviable under the Customs Act. The said section 2(15) of the Customs Act is reproduced below: "2(15). "duty" means a duty of customs leviable under this Act;" 17. Section 12 of the Customs Act deals with dutiable goods. Sub-section (1) of section 12 is reproduced below: "Section 12. Dutiable goods.-(1) Except as otherwise provided in this Act, or any other law for the time being in force, duties of customs shall be levied at such rates as may be specified under the Customs Tariff Act, 1975 or any....
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....stood in the same sense. It is for this reason that it has been contended by learned Counsel for the Appellant that the expression "duty of customs" appearing at serial no. 2 of the Exemption Notification can have only that meaning which is assigned to it under section 2(15) of the Customs Act, which would be the "duty" leviable under the Customs Act and any other duty or tax which is not levied under the Customs Act, but levied under other enactments cannot be treated as a "duty of customs" for the purpose of customs notification. 21. It is also relevant to refer to the judgment of the Supreme Court in Collector of Customs, Madras vs. Indian Organic Chemicals Limited [2000 (118) ELT 3 (S.C)] . Section 19 of the Customs Act relates to determination of duty where goods consist of articles liable to different rates of duty. Section 3 of the Tariff Act deals with levy of additional duty equal to excise duty. The Supreme Court held that since section 19 of the Customs Act applies to determination of "duty", it would only relate to "duty" under the Customs Act as is clear from section 2 (15) of the Customs Act and not the additional duty under section 3 of....
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.... that National Calamity Contingency Duty, Education Cess and Secondary and Higher Education Cess are in the nature of additional excise duty and when an exemption notification exempts duty of excise it would not automatically mean that these additional excise duties are also exempted. Thus, it was held that these additional duties do not come within the scope of the term "duty of excise". 25. Integrated Tax has been defined under section 2(12) of the Integrated Tax Act to mean the "integrated goods and services tax levied under the Integrated Tax Act. Section 5 of the Integrated Tax Act deals with levy and collection. It provides that there shall be levied a tax called the integrated goods and services tax on all inter-State supplies of goods or services or both on the value as determined under section 15 of the Central Goods and Services Act and at such rates, not exceeding 40 per cent as may be notified by the Government. The proviso stipulates that the integrated tax on goods imported into India shall be levied and collected in accordance with the provisions of section 3 of the Tariff Act on the value as determined under the Tariff Act at the point when duties of cu....
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....s from the aforesaid discussion is; (1) Though the expression duty of customs has not been defined under the Exemption Notification but it can only have that meaning which has been assigned to the meaning of 'duty' under section 2(15) of the Customs Act. It would, therefore, mean the "duty of customs" leviable under the Customs Act and any other duty not levied under the Customs Act, would not be duty of customs for the purposes of any Notification issued under the Customs Act. (2) Integrated tax has also not been defined under the Exemption Notification. It has been defined under section 2(12) of the Integrated Tax Act to mean the tax levied under the Integrated Tax Act. Integrated Tax is levied under section 5 of the Integrated Tax Act and not under section 12 of the Customs Act, and therefore, cannot be called as duty of customs; and (3) Section 3 (7) of the Tariff Act only provides the manner of collection of the integrated tax by the customs authorities in case of import of goods. 29. It is in the light of the aforesaid discussion that the meaning assigned to duty of customs in the Exemption Notification ....
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.... (2) of the Exemption Notification would only mean the duty of customs leviable under the Customs Act as have been specified in the First and Second Schedules to the Tariff Act and not to integrated tax, which is levied under section 5 of the Integrated Tax Act. 33. This apart, it is also necessary to consider whether omission to add 'specified in the First Schedule' after 'Duty of Customs' in the conditions set out in column (3) of the Table at serial number 2 is deliberate or unintentional. To appreciate this, it would be necessary to examine whether it was at all necessary to add 'leviable thereon which is specified in the said First Schedule' after 'duty of customs' in the main body of the Exemption Notification. As noticed above, even if 'leviable thereon which is specified in the said First Schedule' after 'duty of customs' in the main body of the Exemption Notification, had not been added, it would have necessarily meant duty of customs that is defined under section 2(15) of the Customs Act read with section 12 of the Customs Act and section 2 of the Tariff Act. This in turn, would relate to the First Schedule of the Tariff Act. It, therefore, ....
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....cannot bear an extended meaning so as to include special excise duty and auxiliary excise duty. The relevant paragraph of the judgment is reproduced below: "9....................... Now, it is no doubt true that in these various notifications referred to above, the Central Government has, while granting exemption under Rule 8(1), used specific language indicating that the exemption, total or partial, granted under each such notification is in respect of excise duty leviable under the Central Excises and Salt Act, 1944. But, merely because, as a matter of drafting, the Central Government has in some notifications specifically referred to the excise duty in respect of which exemption is granted as `duty of excise' leviable under the Central Excises and Salt Act, 1944, it does not follow that in the absence of such words of specificity, the expression `duty of excise' standing by itself must be read as referring to all duties of excise. It is not uncommon to find out that the legislature sometimes, with a view to making its intention clear beyond doubt, uses language ex abundanti cautela though it may not be strictly necessary and even without it the same intention can be spel....
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..... It would, therefore, be appropriate to refer to the judgment of Bombay High Court in Devidayal Electronics. The Bombay High Court held that since the Notification used the word "factory" and also the word "industrial unit" in the same Notification, it has to be assumed that the said two words were intended to bear different meanings. The Court, therefore, held that the words "industrial unit" must mean something other than "factory". 37. This judgment of the Bombay High Court in Devidayal Electronics was approved by the Supreme Court in Collector of Central Excise vs. Himalayan Co-op. Milk Product Union Limited [2000 (122) ELT 327 (S.C)]. 38. It would also be pertinent to refer to the decision of the Supreme Court in S. S. Ayodhya Distillery. The issue that arose before the Supreme Court was whether "paddy husk" can be treated as "rice husk". The Supreme Court held that when two expressions have been used in the same Notification, two different meanings should be assigned thereto. The observations are as follows: "11. As paddy and rice are considered to be the separate commodities, paddy....
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....e the effect of both the Explanations to be the same. If both the Explanations were meant to have the same effect, and to have retrospective application, it was unnecessary for Parliament to use two different expressions in the Explanations to Section 32K(1) and Section 32-O(1)(i) of the Act, as use of the same words would have sufficed. When two different expressions are used by the same statute, one has to construe these different expressions as carrying different meanings." 41. In this connection it would also be relevant to refer to the entries at serial no. 1 of the Exemption Notification. Serial no. 1 specifically refers to what types of duties or taxes are leviable under different situations. There is a specific reference to integrated tax in column (3) in connection with serial no. 1 (d) and to integrated tax and compensation cess in connection with serial no. 1(e). There is, therefore, enough intrinsic evidence in the Exemption Notification itself to show that integrated tax cannot be understood as duty of customs in the Exemption Notification. 42. Learned Authorized Representatives of the Department have placed relia....
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....he Finance Act have been replaced by the integrated tax under section 3(7) and compensation cess under section 3(9) of the Tariff Act. It cannot, therefore, be contended that "duty of customs" referred to in the condition against serial no. 2 of the Exemption Notification would include integrated tax. 44. The inevitable conclusion that follows from the aforesaid discussion is that the absence of mention of integrated tax and compensation cess in column (3) under serial no. 2 of the Exemption Notification would mean that only the basic customs duty on the fair cost of repair charges, freight and insurance charges are payable and integrated tax and compensation cess are wholly exempted. 45. It would, therefore, not be necessary to examine the contention of learned Authorised Representatives of the Department that in case of any ambiguity in an Exemption Notification, the benefit should go to the Revenue. It would also not be necessary to examine the remaining contentions advanced by the learned Counsel for the Appellant that the activity of repairs is "supply of service" or that the activity would not fall under the category of 'import of service....