TaxTMI 
TaxTMI 
2021 (11) TMI 550
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....t 4% in spite of amendment by way of substitution of Sl.Nos.28 and 29 in Notification No.FD 116 CLS 2006 (9), Bangalore, dated 31.03.2006 with Sl.Nos.28, 29 and 30 with effect from 1- 1-2007 by Notification No.FD 238 CSL 07, dated 7-7-2007, as Sl.Nos.28 and 29 were included in Notification dated 31-3-2006 w.e.f. 1-1-2007, and accordingly to have passed the impugned order? 2. Whether on the facts and in the circumstances of the case, the Karnataka Appellate Tribunal was right in holding that the petitioner did not prove that Multi Function Printers sold from 01.01.2007 to 31.03.2007 fell under Central Excise Tariff Entry 8443.31.00 when there was no dispute before the assessing authority and first appellate authority that MFP printers fell under Central Excise Tariff Entry 8443.31.00 and the dispute was whether Entry 8443.31.00 of the Central Excise Tariff Act was brought into Notification No.FD 116 CSL 2006(9), Bengaluru, dated 31.03.2006 with effect from 01.01.2007 by way of amendment and substitution and further when there were no arguments advanced by both the parties that MFP sold by the petitioner did not fall under Entry 8443.31.00? 3. Whether on the facts a....
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....urt raising the substantial questions of law as aforesaid. 6. Learned counsel for the assessee inviting the attention of the Court to the various notifications issued with respect to the MFPs argued that Assessing Authority has grossly erred in giving an interpretation to the notification dated 07.07.2007 issued by the Government of Karnataka substituting the notification dated 31.03.2006, as not issued under Section 30 of the Act and hence the said notification cannot be given retrospective effect and as such the benefit under the said notification cannot be extended to the assessee for the periods in question. This view has been confirmed by the Appellate Authority and the Tribunal proceeded to hold that the assessee has failed to prove that the MFPs purchased and sold by it would fall within the entry under Sl.No.8443.31 or 8443.32 of the Central Excise Tariff Act, 1985 which was not the controversy involved in, either before the Assessing Authority or before the Tribunal. 7. Learned counsel argued that the Tribunal having held that the machines which perform two or more of the functions of printing etc., would certainly fall within the subject heading No.8443.31 to 8443.3....
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....ub-heading numbers under the Central Excise Tariff Act, 1985 (Central Act 5 of 1986), as IT (Information Technology) products, namely:- TABLE Sl.No. Heading and subheading No. DESCRIPTION (1) (2) (3) 1. 8469.11.00 Word processing machines 2. 8469.12.00 Electronic typewriters 3. 8470.10.00 Electronic calculator capable of operations without an external source of electrical power and pocket size data recording, reproducing and displaying machines with calculating functions (including electronic diaries other than those covered under heading No.8471) or incorporating a printing device 4. 8471 Automatic data processing machines and units thereof; magnetic or optical readers, machines for transcribing data on to data media in coded form and machines for processing such data 5. 8473.10.00, 8473.21.00, 8473.30 Parts and accessories (other than covers, carrying cases and the like) suitable for use solely or principally with machines of subheading 8469.11.00, 8469.12.00, 8470.10.00 and 8471 6. 8501.10.11 8501.10.12 DC Micro motors and Stepper motors of an output not exceeding 37.5 watts 7. 8503 Parts ....
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....heading or, as the case may be, sub-heading, and the aforesaid description is different in any manner from the corresponding description in the Central Excise Tariff Act, 1985, then only those commodities described as aforesaid will be covered by the scope of this notification and other commodities though covered by the corresponding description in the Central Excise Tariff will not be covered by the scope of this notification. (3) Subject to Explanation 2, for the purpose of any entry contained in this notification, where the description against any heading or, as the case may be, sub-heading, matches fully with the corresponding description in the Central Excise Tariff, then all the commodities covered for the purposes of the said tariff under that heading or sub-heading will be covered by the scope of this notification. (4) Where the description against any heading or sub heading is shown as "other" then the interpretation as provided in Explanation 2 shall apply." 10. This notification was amended by notification FD 43 CSL 07(I) Bengaluru dated 23.03.2007 with immediate effect issued by the Government of Karnataka in exercise of powers conferred by clause (....
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....rch, 2006 namely: In the said notification, in the Table, for serial numbers 28 and 29 and the entries relating thereto, the following shall be substituted, namely: "28. 84443.31.00 Machines which perform two or more of the functions of printing, copying or facsimile transmission, capable of connecting to an automatic data processing machine or to a network. 29. 8443.32.00 Other, capable of connecting to an automatic data processing machine or a to a network. 30. 8443.99.00 Parts and accessories of goods of sub-headings 8443.31 and 8443.32 including ink cartridges, with print head assembly and ink spray nozzle." 13. The assessing authority placing reliance on the clarification dated 29.02.2008 issued by the Commissioner of Commercial Taxes in respect of other dealers dealing with MFPs proceeded to analyse these notifications. Merely for the reason that the notification dated 07.07.2007 was not issued under Section 30 of the KVAT Act, the Tribunal held that the said notification could not be applied restrospectively and it is not an amendment to the notification dated 31.03.2006. Thus, the effect of said notification is held to be prospective. ....
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....g. 'Substitution' has to be distinguished 'supersession' or a mere repeal of an existing provision. 25. Substitution of a provision results in repeal of the earlier provision and its replacement by the new provision (See Principles of Statutory Interpretation, it is to be found in West U.P. Sugar Mills Assn. V. State of U.P., State of Rajasthan V. Mangilal Pindwal, Koteswar Vittal Kamath V. K.Rangappa Baliga and Co. and A.L.V.R.S.T. Veerappa Chettiar V. S.Michael. In West U.P. Sugar Mills Association case a three-Judges Bench of this Court held that the State Government by substituting the new rule in place of the old one never intended to keep alive the old rule. Having regard to the totality of the circumstances centring around the issue the Could held that the substitution had the effect of just deleting the old rule and making the new rule operative. In Mangilal Pindwal case this Court upheld the legislative practice of an amendment by substitution being incorporated in the text of a statute which had ceased to exist and held that the substitution would have the effect of amending the operation of law during the period in which it was in force. In Koteswar case a three....
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....corporate itself, or a part of itself, into the earlier, then the earlier Act must thereafter be read and construed (except where that would lead to a repugnancy, inconsistency or absurdity) as if the altered words had been written into the earlier Act with pen and ink and the old words scored out so that thereafter there is no need to refer to the amending Act at all." 17. In the light of these legal principles enunciated by the Hon'ble Courts, it is well settled that the substitution has two steps. First, the old provision is made seized to exist and next, the new provision is brought into existence in its place. Both these steps are taken simultaneously thereby replacing old provision with the new provision. The notification dated 07.07.2007 would certainly indicate that the substitution has been made to Sl.Nos. 28 and 29 and entries relating thereto, existing in the notification dated 31.03.2006. Thus, it could not be said gainsaid that this notification has to be given prospective effect. However, we have observed that the notification dated 31.03.2006 was amended by notification dated 04.04.2007 by giving effect to the entries at Sl.Nos.28 and 29 with effect from 01.01.200....