The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chennai held that a 2013 notification restoring a concessional rate of basic customs duty could not be applied to imports made in 2012. It also upheld the use of the extended limitation period to recover the duty.
The bench of P. Dinesha (Judicial Member) and M. Ajit Kumar (Technical Member) has dismissed an importer’s appeal seeking a concessional rate of basic customs duty on carbonless paper imported under three Bills of Entry in 2012. The Tribunal held that the relevant tariff heading was absent from the concession available on the dates of import, and a later notification did not grant the benefit retrospectively.
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The company regularly imported “Carbon Less Paper Black Image”, classifiable under Customs Tariff Heading 4809. The dispute concerned three Bills of Entry dated 3 April, 18 June and 28 September 2012.
The importer claimed a concessional rate of basic customs duty under Serial No. 553 of Notification No. 46/2011-Cus., dated 1 June 2011. Customs authorities disputed the claim because Notification No. 127/2011-Cus., dated 30 December 2011, had amended the concession before those imports took place.
A show cause notice issued on 27 March 2013 proposed denial of the benefit. The adjudicating authority confirmed the proposal in November 2014. The Commissioner (Appeals) declined to treat a subsequent notification as retrospective, while directing the adjudicating authority to seek clarification from the Board. The importer then approached CESTAT.
The company maintained that the exclusion of tariff headings 480920 and 480990 from the amended concession was an inadvertent government error. It pointed to India’s trade commitments under the India–ASEAN Trade in Goods Agreement and relied on documents obtained under the Right to Information Act.
It also argued that Notification No. 35/2013-Cus., dated 18 July 2013, which included the relevant goods, corrected the omission and should therefore apply to its 2012 imports. In support, the importer cited decisions in which later notifications correcting acknowledged mistakes had been treated as clarificatory.
The customs department opposed that reading. It submitted that the applicable notifications stated when their provisions took effect and that the 2013 notification did not say it operated retrospectively.
CESTAT found that, when the three Bills of Entry were filed, the amended notification governed the concession. The Tribunal recorded that Heading 48099000 did not appear in the applicable notification, so goods under that heading could not receive the claimed benefit at that time.
The Bench also noted that another amendment, Notification No. 64/2012-Cus. dated 31 December 2012, did not include the relevant Heading 4809 entry. Notification No. 35/2013-Cus. subsequently covered goods under Headings 4809, 480920 and 480990, but gave no retrospective effect to that inclusion.
The Tribunal distinguished the importer’s cited judgments. In those cases, it said, the government had acknowledged a mistake and taken corrective action. It found no comparable positive admission of error in the present case. The documents relied on by the importer were addressed to another assessee and could not, in the Bench’s view, establish that the notification should be read differently for all importers.
Applying the principles of interpretation discussed in Supreme Court decisions including Safari Retreats, Vatika Township and Vijay, the Bench held that Notification No. 35/2013-Cus. operated prospectively from its publication in the Gazette. It therefore rejected both the claim to the 2012 concession and the argument for retrospective application of the 2013 notification.
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