Case Law Details
In re Endress+Hauser Flowtec (India) Pvt. Ltd (CAAR Mumbai)
In a recent case concerning duty drawback, the Customs Authority for Advance Rulings (CAAR) in Mumbai has refrained from providing a ruling. The case involved M/s. Endress+Hauser Flowtec (India) Pvt. Ltd., seeking clarification on whether duty drawback could be claimed on the import of parts of calibration rigs subjected to retrofitting operations before export.
The applicant, Endress+Hauser Flowtec, intended to import the measuring sections of second-hand calibration rigs, perform retrofitting operations on them in India, and then re-export them. They sought clarification on their eligibility to claim duty drawback under Section 75 of the Customs Act, 1962, read with the Customs and Central Excise Duties Drawback Rules, 2017.
Endress+Hauser Flowtec argued that their case fell under the purview of the Customs Authority for Advance Rulings, citing relevant sections of the Customs Act. However, CAAR found that the question at hand did not fit within the parameters outlined for seeking advance rulings.
The CAAR’s decision hinged on the interpretation of the relevant clauses of the Customs Act, particularly Section 28H(2)(d), which outlines the scope of questions eligible for advance rulings. The CAAR emphasized that the provision is specific to matters concerning the applicability of notifications related to taxes or duties under the Customs Act or the Customs Tariff Act, 1975.
While Endress+Hauser Flowtec contended that duty drawback should be considered under this provision, CAAR maintained that duty drawback is a rebate of duty, not a levy of duty itself. The authority highlighted the distinction between the chargeability/leviability of duty and the availability of refund/drawback, stating that they are separate mechanisms under the Customs Act.
Furthermore, the CAAR underscored that the absence of specific mention of duty drawback within the clause (d) of Section 28H(2) indicated that duty drawback questions were not intended to fall under the ambit of advance rulings. The authority also emphasized the importance of interpreting statutory provisions in their entirety and within their context.
In conclusion, CAAR declined to rule on the duty drawback question, citing jurisdictional limitations imposed by the Customs Act. The decision underscores the need for a comprehensive understanding of statutory provisions and their applicability to specific cases, ensuring adherence to legal frameworks in matters of customs and duties.
FULL TEXT OF THE ORDER OF CUSTOMS AUTHORITY OF ADVANCE RULING, MUMBAI
M/s. Endress +Hauser Flowtec (India) Pvt. Ltd. (having IEC No. 2799000185) and hereinafter referred to as ‘the applicant’, in short) filed an application (CAAR-I) for advance ruling before the Customs Authority for Advance Rulings, Mumbai (CAAR in short). The said application was received in the secretariat of the CAAR, Mumbai on 24.04.2023 along with its enclosures in terms of Section 2811 (1) of the Customs Act, 1962 (hereinafter referred to as the ‘Act’ also). The applicant has sought advance ruling as to the following question:
“Whether duty drawback in terms of Section 75 of the Customs Act, 1962 read with Rule 3 and 7 of Customs and Central Excise Duties Drawback Rules, 2017 can be claimed in respect of import of parts of calibration rigs on which manufacturing activity, that is, retrofitting operations arc performed and thereafter the same is exported?”
2. The applicant has submitted as follows in the statement of relevant facts having a bearing on the question(s) on which advance ruling is required:
That they manufacture and supply electromagnetic flowmeters, Coriolis mass flowmeters, vortex and ultrasonic flowmeters to Australia, South Africa, Singapore, Malaysia, Thailand and Indonesia. Additionally, they also supply vortex flowmeters to TLV Japan and intend to undertake retrofitting operations on imported “measuring section of second-hand calibration rigs”. Such operations are required to extend the useful life of calibration rigs, and to incorporate current technological changes. It is imperative to note that only the measuring section in the calibration rigs will be imported into India on payment of applicable duties and taxes. During the retrofitting operations, the parts and components which have wear and tear or obsolete parts including all rubber components, seals, hydraulic and pneumatic valves, actuators, hose pipes, bearings, stepper motor, sensors, etc. will be replaced with new parts which are procured locally. After carrying out the retrofitting operations on the measuring section of the calibration rigs, they will be re-exported back to a country other than the country it was imported from. These rigs will not be sold in the domestic market and will be exported in toto. The measuring section of calibration rigs being imported are second-hand capital goods and the same are freely importable without any licence / authorisation.
3. The applicant has submitted as follows in the statement containing Applicant’s interpretation of law and/or facts, as the case may be, in respect of the question (s) on which advance ruling is required:
The Applicant herein has been granted a valid Importer-Exporter Code Number (IEC) under Section 7 of the Foreign Trade (Development and Regulation) Act, 1992. The same is 2799000185. The questions on which an application for an advance ruling can be made have been provided under Section 2811 of the Customs Act. As per the said Section 28H(2) of the Customs Act, an applicant may make an application for advance ruling in respect of questions relating to:
(a) Classification of goods under the Customs Tariff Act, 1975;
* * * *
(d) applicability of notifications issued in respect of duties under this Act, the Customs Tariff Act, 1975 (51 of 1975) and any duty chargeable under any other law for the time being in force in the same manner as duty of customs leviable under this Act.
The present application is being made by the Applicant to determine their eligibility to claim drawback in terms of Section 75 of the Customs Act read with Rule 3 and Rule 7 of the Customs and Central Excise Duties Drawback Rules, 2017 (hereinafter referred to as the “Drawback Rules, 2017”) issued under the Notification No. 88/2017-Cus. (N.T.) dated 21.09.2017 of duty paid on import of measuring section of second-hand calibration rigs. The Applicant is proposing to perform the retrofitting operations on the measuring section of calibration rigs in India. Since these are high-valued goods which will be re-exported post the manufacturing activity, the Applicant intends to claim drawback under Section 75 of the Customs Act. Therefore, the Applicant now wish to have ruling from the present authority on the eligibility of drawback under Section 75 of the Customs Act read with Rule 3 and 7 of Drawback Rules, 2017 in respect of the proposed transaction.
Further, the applicant states that the Section 75 of the Customs Act deals with the drawback on materials used in the manufacture of final products exported out of India as per the Rules framed thereunder. Relevant portion of Section 75 of the Customs Act is extracted below for ease of reference:
“SECTION 75. Drawback on imported materials used in the manufacture of goods which are exported. —
(1) Where it appears to the Central Government that in respect of goods of any class or description manufactured, processed or on which any operation has been carried out in India, being goods which have been entered for export and in respect of which an order permitting the clearance and loading thereof for exportation has been made under section 51 by the proper officer, or being goods entered for export by post under [clause (a) of section 84] and in respect of which an order permitting clearance for exportation has been made by the proper officer, a drawback should be allowed of duties of customs chargeable under this Act on any imported materials of a class or description used in the manufacture or processing of such goods or carrying out any operation on such goods, the Central Government may, by notification in the Official Gazette, direct that drawback shall be allowed in respect of such goods in accordance with, and subject to, the rules made under sub-section (2)…”
As mentioned above, for this purpose, Drawback Rules, 2017 was notified vide Notification No. 88/2017-Cus. (N.T.) dated 21.09.2017. “Duty drawback” refers to claiming back, from the Government, import duties paid on raw materials / inputs used in the manufacture of export product. The intention being that exports should not be burdened with taxes/duties. Drawback is defined under Section 2(a) of the Drawback Rules, 2017 as:
“2. (a) “drawback” in relation to any goods manufactured in India and exported, means the rebate of duty excluding integrated tax leviable under sub-section (7) and compensation cess leviable under sub-section (9) respectively of section 3 of the Customs Tariff Act, 1975 (51 of 1975) chargeable on any imported materials or excisable goods used in the manufacture of such goods.”
As is evident, Rule 2(a) of the Drawback Rules, 2017 provides for the following:
-Drawback can be claimed on manufacture and export of finished goods;
-Drawback is equal to rebate of duty paid on imported / excisable goods;
– The imported/ excisable goods shall be used in the manufacture of finished goods;
– Drawback of integrated tax and compensation cess paid on import cannot be claimed.
In the present case, the Applicants intend to claim drawback of duty paid on import of measuring section of the second-hand calibration rigs. These rigs arc being imported for performing retrofitting operations on them in order to increase their useful life. These arc high-valued goods which will be re-exported post the retrofitting operations performed on them. As is evident from Section 75 of the Customs Act read with Rule 3 of the Drawback Rules, 2017, in order for the Applicant to be eligible to claim drawback, the imported material shall be used in the manufacture of finished goods which arc exported. In this regard, the Applicant submits that the retrofitting operations performed on the measuring section of the calibration rigs amounts to manufacture. Detailed submission in this regard is provided below:
Scope of the term ‘manufacture’:
The Applicant submits that the term ‘manufacture’ is defined in Section 2(e) of the Drawback Rules, 2017. It states that “manufacture” includes processing of or any other operation carried out on goods, and the term manufacturer shall be construed accordingly. Relevant portion is extracted below for reference:
“(e) “manufacture” includes processing of or any other operation carried out on goods, and the term manufacturer shall be construed accordingly;”
As is evident, the definition of ‘manufacture’ under the Drawback Rules, 2017 is inclusive in nature and covers any kind of processing or other operations. In the present case, during the retrofitting operations, the parts and components which have wear and tear or obsolete parts including all rubber components, seals, hydraulic and pneumatic valves, actuators, hose pipes, bearings, stepper motor, sensors, etc. will be replaced with new parts. These new parts are procured locally. Therefore, the present activity amounts to manufacture. The same is evident also from the fact that there is substantial value addition (more than 50%) to the imported measuring section visa-vis the exported measuring section of calibration rigs.
4. A personal hearing in the matter was conducted on 17.01.2024 in the office of the CAAR, Mumbai. During the personal hearing the authorized representatives of MA. Endress+Hauser Flowtec (India) Pvt. Ltd., Shri T. Vishwana than and Ms. Neha Agrawal, both advocates reiterated their earlier written submissions made in the applications to CAAR, Mumbai. On being asked whether the decision on the activity of manufacturing is covered under section 2811 (application for advance ruling) of the Customs Act, 1962, both the advocates sought two week-time to explain the same.
Another personal hearing in the matter was conducted on 12.02.2024 in the office of the CAAR, Mumbai. During the personal hearing the same representatives were present for Mis. Endress+Hauser Flowtec (India) Pvt. Ltd. and they reiterated their earlier written submissions made in the applications to CAAR, Mumbai. They argued that their case duly falls under the purview of mandate or CAAR under Section 2811 of the Act. They also relied upon the case law in the matter of U01 vs. Customs and Central Excise Settlement Commission, Mumbai 2010 (258) ELT 476 (Bombay) HC. They, further, explained that the subject process explained by them in the application amounts to manufacturing as per Drawback Rules, 2017 notified vide Notification No. 88/2017-Cus. (N.T.) dated 21.09.2017 and arc well covered under Rule 2(e) definitions.
Nobody appeared from the concerned Jurisdictional Customs Commissionerate i.e. Nhava Sheva-V, INCH during both the Personal hearings either online or in person and also the office of the CAAR, Mumbai has not received any relevant records/comments on the subject application from there till date.
5. The applicant has submitted that the calibration rig will be imported on payment of applicable duties, on importation. The parts / components used in the retrofitting operations consist of parts / components imported on payment of duties or procured indigenously on payment of GST/IGST. Whatever IGST paid on imports and CGST/SGST/IGST paid on local procurement will be taken as input tax credit by the applicant. No duty drawback of such GST (IGST/ CGS’F/ SGST) will be claimed, which is otherwise not available. Prior to 1995, Section 75 provided for drawback of customs duties suffered on inputs used in the manufacture of final products exported. However, vide Budget 1995, an amendment was brought out in Section 75, whereby drawback was allowed for inputs not only used in manufacture, but also for processing or other operations for export or goods.
The applicant has submitted that CBIC Vide Circular No. 57/95-Cus, dated 30.05.1995 also clarified this position, stating that the scope of drawback has been widened by amending the definition of “manufacture”. Thus, this is evident that even if goods imported on payment of duties are not only used for manufacture but even if processed and exported, then also drawback under Section 75 would be available. Notification No 21/2004-CE (N.T.) dated 06.09.2004 issued tinder Rule 18 of the Central Excise Rules, 2002, allows rebate of duty paid on excisable goods for materials/inputs used in manufacture/ processing of export goods. Part V of Chapter 8 of Central Excise Law Manual also clearly clarifies that materials may be used for manufacture of processing i.e., processing not amounting to manufacture shall also be eligible for the benefit. The Hon’ble Supreme Court in the matter of K.R. Steel Union Ltd Vs CC, Kandla 2001 (129) ELT 273 (S.C.) has held that a liberal approach should be taken in export incentive schemes.
The applicant has further submitted that the “duty drawback”, is nothing but a reimbursement of the duties suffered on goods imported, which arc exported after carried out manufacturing/ processing activities etc. The applicant has placed reliance on the decision of the Hon’ble Bombay High Court in Union of India Vs Cus & C. Ex. Settlement Commission , Mumbai 2010 (258) ELT 476 Mom), wherein the question was regarding the maintainability of an application filed before the Settlement Commission in connection with the recovery of drawback on goods exported out of India. The issue debated was whether “recovery of duty drawback” would fall within the scope of ‘case’ as defined under Section 127A(b) of the Customs Act or not. Section 127A defines case as under:
(b) “case” means any proceeding under this Act or any other Act for the levy, assessment, and collection of customs duty, pending before an adjudicating authority on the date on which an application under sub-section (1) of section 12713 is made:”
Revenue contended that recovery of duty drawback does not involve “levy, assessment and collection of customs duty” as envisaged under Section 127A(b) of the Act, and consequently the said proceedings arc not covered within the meaning of ‘case’, under Section 127A(b) of the Act. Hence, it was contended that the application was not maintainable before the Settlement Commission. On the other hand, the Respondent Assessee was of the view that while the Customs Act provides for levy of customs duty, it also provides for refund. The provisions relating to refund of duty contained in Section 27 of the Act also extend to drawback. This is because drawback is the reimbursement of the customs duty, in whole or in part, paid on the goods used in the manufacture of export goods and that is why it is covered by the same provision for refund of duty. On analysis. the Hon’ble Court held that it cannot be disputed that duty drawback is a remission of duty and that duty drawback or claim for duty drawback is nothing but a claim for refund of duty, and accordingly the same falls within the ambit of ‘case’.
Further, the applicant has relied upon Rule 2 of the drawback rules and has argued that sub-rules (1) and (2) of Rule 3 of the Drawback Rules also establish a direct nexus between duty paid and the amount of duty to canvass that duty drawback is part of duty itself. Accordingly, drawback is nothing but a refund of duty which has been paid by the assesse and the same is therefore covered under Section 28H of Customs Act. The Drawback Rules have been notified by a Notification, exercising the powers conferred under Section 75 of the Customs Act and Section 37 of the Central Excise Act, 1944 (1 of 1944). Drawback Rates are also notified under Section 75 read with Rule 3 of the Drawback Rules. In view of these submissions, the applicant has contended that the application filed by the Applicant before Hon’ble Authority is maintainable in terms of Section 28H.
6. I have taken into consideration all the materials placed on record in respect of the application including the submissions made by the applicant during the course of personal hearing and other additional submissions reproduced (supra), I therefore proceed to decide the present application on the basis of the information on record as well as the existing legal framework.
6.1 First and foremost, let me examine whether any such jurisdiction of pronouncing ruling as to the question of duty drawback is vested in this Authority or otherwise. The questions on which the advance ruling can be sought are listed out in sub-section (2) of Section 2811 of the Customs Act, 1962 which inter alia includes the question of ‘applicability of notifications issued in respect of tax or duties under this Act or the Customs Tariff Act, 1975 or any tax or duty chargeable, under any other law for the time being in force in the same manner as duty of customs leviable under this Act or the Customs Tariff Act’. Applicant intends to claim duty drawback in terms of Section 75 of the Customs Act, 1962 read with the Drawback Rules, 2017 notified vide Notification No. 88/2017-Cus. (N.T.) dated 21.09.2017, on duty paid on import of measuring section of second-hand calibration rigs. I have gone through the said notification and it is quite obvious that the Central Government has notified Customs and Central Excise duties drawback Rules, 2017 by this notification in exercise of the powers conferred by Section 75 of the customs Act. 1962 and Section 37 of the Central Excise Act, 1944.
6.2 The applicant is of the view that their application is in conformity with the clause (d) of sub-section 2 of the section 28H of the Customs Act, 1962. The applicant has further contended that first line of the cited clause (d) is as follows “applicability of notifications issued in respect of tax or duties under this Act” and the question involved in the instant application which is in respect of drawback falls under the jurisdiction of the Customs Authority for Advance Ruling to decide. The applicant has contended that any matter which is related to taxes or duties be it levy/charge of duty or refund/rebate/drawback of duty can be decided by this Authority as the words ‘tax or duties’ are not attached with any specific word i.e. levy or refund or drawback in the clause (d) in the first line, therefore, all the activities related to taxes or duties be it levy or refund arc covered by this clause. Their application is fit for seeking advance ruling on the question of drawback.
7. As per clause (d) of sub-section 2 of the section 28H of the Customs Act, 1962, the questions on which the Advance Ruling can be sought shall be in respect of, –
(a) classification of goods under the Customs Tariff Act, 1975;
(b) applicability of a notification issued under sub-section (1) of section- 25, having a bearing on the rate of duty;
(c) the principles to be adopted for the purposes of determination of value of goods under the provisions of the Customs Act, 1962
(d) applicability of notifications issued in respect of tax or duties under this Act or the Customs Tariff Act, 1975 or any tax or duty chargeable under any other law for the time being in force in the same manner as duty of customs leviable under this Act or the Customs Tariff Act;
(e) determination of origin of the goods in terms of the rules notified under the Customs Tariff Act, 1975 and matters relating thereto.
(f) any other matter as the Central Government may, by notification, specify
7.1 In the present case, Mis. Endress+Hauser Flowtec (India) Pvt. Ltd. has sought Advance Ruling as to the following question:
“Whether duty drawback in terms of Section 75 of the Customs Act, 1962 read with Rule 3 and 7 of Customs and Central Excise Duties Drawback Rules, 2017 can be claimed in respect of import of parts of calibration rigs on which manufacturing activity, that is, retrofitting operations are performed and thereafter the same is exported?’
As is clear from the applicant’s above question the matter does not pertain to classification of goods under the Customs Tariff Act, 1975 or to the grant of exemptions of duty under section 25(1) of the Customs Act, 1962 and this question is neither concerned with the valuation nor with origin of imported goods. In plain meaning, the issue also does not pertain to applicability of notifications issued in respect of tax or duties under this act or the Customs Tariff Act, 1975 or any tax or duty chargeable under any other law for the time being in force in the same manner as duty of customs leviable under this act or the Customs Tariff Act, 1975, which will be further discussed.
7.2 However, in view of the clause (0 reproduced above, during the personal hearings representatives of the applicant were asked, if there is any notification which have specified other questions under the purview of this Authority, for that their reply was in negative. On perusal of the other clauses i.e. (a), (b), (c) and (e), it is quite obvious that the case in hand does not pertain to these clauses.
7.3 However, clause (d) is worth discussing before passing any ruling in respect of the case in hand. The applicant has drawn attention of this Authority to the first line of the said clause, however, at the same time the applicant seems to have not considered the importance of the words ‘in respect of, ‘chargeable’ and ‘leviable’ mentioned in that clause in totality. A clause of any statute must be read as a whole and it must be interpreted in a complete and comprehensive way, mere focusing on some words for sake of convenience is not a right approach. I am of the view that other lines of the clause (d) are also equally important to decide the case in hand Rest of the portion of the clause (d) whereupon the learned advocates present for the applicant have not drawn attention are “applicability of Notification issued ………….. 1975, or any tax or duty chargeable under any other law for the time being in force in the same manner as duty of customs leviable under this Act or the Customs Tariff Act”. Interpretation of the clause (d) is incomplete without considering the words ‘Notification’, `tax or duties’, ‘chargeable’ and ‘leviable’.
It is very clear that the wordings used in the opening lines of the clause (d) of section 28(H) (2) starts with “applicability of notifications” issued in respect of:
(i). tax or duties under Customs Act, 1962 or
(ii) tax or duties under the Customs Tariff Act, 1975 or
(iii) any tax or duty, chargeable under any other law for the time being in force in the same manner as duty of customs leviable under this Act or the Customs Tariff Act”.
Further, as per the dictionary meaning of the term “in respect or’ simply means in connection with. The courts also have interpreted “in respect of to mean connected with or attributable to. Thus, this clause is only connected with the Notification issued in respect of tax or duty under the Customs Act, 1962 or under the Customs Tariff Act, 1975 or any tax or duty chargeable under any other law for the time being in force in the same manner as duty of customs leviable under this Act or the Customs Tariff Act. Needless to say that the duty under the Customs Act is charged and levied in terms of Section 12 of the Customs Act read with Section 2 and/or 3 of the Customs Tariff Act, 1975.
It is further important to note that the term duty is defined under Customs Act, 1962 as per follows:
“2. Definitions
In this Act, unless the context other Wise requires-
(15) “duty” means a duty of customs leviable under this Act”.
…… ….Emphasis Supplied
8. On the other hand, drawback is defined under Section 2(a) of the Drawback Rules, 2017 as:
“2. (a) “drawback” in relation to any goods manufactured in India and exported, means the rebate of dull, excluding integrated tax leviable under sub-section (7) and compensation cess leviable under sub-section (9) respectively of section 3 of the Customs Tariff Act, 1975 (51 of 1975) chargeable on any imported materials or excisable goods used in the manufacture of such goods.”
From this definition of drawback, it is amply clear that drawback is a rebate of duty and it is not a levy of duty, whereas, clause (15) of section 2 of the Customs Act, 1962 defines ‘duty’ as a duty of customs leviable under this Act.
8.1 The provision relating to the refund of duty is specifically provided under the express provision of section 27 of the Customs Act, 1962.
Proviso to sub-section 2 of section 27 under the act reads as follows:
“PROVIDED that the amount of duty and interest, if any, paid on such duty as determined by the Assistant Commissioner of Customs or Deputy Commissioner of Customs under the foregoing provisions of this sub-section shall, instead of being credited to the Fund, be paid to the applicant, if such amount is relatable to-
(a)…………..
(b)…………..
(c)…………..
(d)…………..
(e) drawback of duty payable under sections 74 and 75;
On conjoint reading of definition 2(a) of the Drawback Rules, 2017 and the provision relating to refund of duty under section 27 (2)(c), it emerges that drawback is rebate of duty that is payable under section 74 and 75 of the Customs Act, 1962, whereas, duty means duty of customs leviable under section 12 of the Customs Act, 1962.
8.2 Chapter V of the Customs Act, 1962 is about “Levy of, and exemption from, customs duties”. Further, under this chapter sub-section (1) of section 12 reads as follows:
“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 (51 of 1975) or any other law for the time being in force, on goods imported into, or exported from, India”.
Similarly, Section 2 of the Customs Tariff Act, 1975 reads as follows:
“SECTION 2. Duties specified in the Schedules to be levied- The rates at which duties of customs shall be levied under the Customs Act. 1962 (52 of 1962), arc specified in the First and Second Schedules”.
In fact, the chargeability/leviability of tax or duties and playability of refund/drawback are two different sets of mechanism under Custom Act for which separate provisions arc made. It can be seen that the notification governing the Drawback Rules, 2017 has been issued by the Central Government in exercise of the powers conferred by section 75 of the Customs Act, 1962 (52 of 1962) and section 37 of the Central Excise Act, 1944 (1 of 1944), and not under the power vested under section 12 of the Customs Act or section 2 or 3 of the Customs Tariff Act. In the present case the matter on which Advance Ruling is sought pertains to duty drawback under section 75 of the Custom Act, which is not a duty/tax/levy/cess charged under either of the Customs Act or Customs Tariff Act. It is also to understand that provision related to the power of Central Government to grant exemption from duty is enumerated under section 25 of the Customs Act, 1962. Exemption is a kind of reduction or removal of compulsory duty leviable that would otherwise be imposed on import/export and any question related to this aspect is specifically covered tinder clause (b) of the sub-section 2 of section 28(11) of the Customs Act, 1962, whereas, the words refund/rebate/drawback arc not expressly envisaged under the provision of the section 28(H)(2)(d) of the Custom Act inasmuch as all the provisions here are related to the questions having a bearing on rate of duty leviable on import/export. The phrases used ‘leviable’ and `payable’ arc differently constructed and are not interchangeable and cannot misunderstood to be one and the same, neither the same is the intention of the government.
Further, the primary rule of constructing statutes is to construct its provisions literally and grammatically giving the words their ordinary and natural meaning. According to this cardinal rule the words, phrases and sentences of the statutes are to be understood in their natural, ordinary or popular and grammatical meaning, unless such a construction leads to an absurdity or the statute suggests a different meaning. Every word in the law should be given meaning as no word is unnecessarily used. Nothing is to added to or taken from a statute unless there are adequate ground to justify the interference.
9. In the case of MIS. Grasim Industries Limited vs. Collector of Customs, Bombay, 2002, the Hon’ble Supreme Court has observed that “No words or expressions used in any statute can be said to be redundant or superfluous. In matters of interpretation one should not concentrate too much on one word and pay too little attention to other words. No provision in the statute and no word in any section can be construed in isolation. Every provision and every word must be looked at generally and in the context in which it is used. It is said that every statute is an edict of the legislature. The elementary principle of interpreting any word while considering a statute is to gather the mens or sententia legis of the legislature. Where the words are clear and there is no obscurity, and there is no ambiguity and the intention of the legislature is clearly conveyed, there is no scope for the Court to take upon itself the task of amending or alternating the statutory provisions. Wherever the language is clear the intention of the legislature is to be gathered from the language used. While doing so what has been said in the statute as also what has not been said has to be noted. The construction which requires for its support addition or substitution of words or which results in rejection of words has to be avoided.
It is understood that in the clause (d) of the sub-section 2 of the section 28(H) of the Customs Act, 1962 there is not any mention of the word ‘drawback’ or refund with the words duty or tax. However, it is amply clear that the words ‘chargeable’ and ‘leviable’ are expressly mentioned in the same clause and it is observed that these words are associated with the words duty and tax. Therefore, addition of the word ‘drawback’ with the words duty or tax is unwarranted and extraneous.
Further, in the case of Harshad Chiman Lal Modi vs. DU’ Universal Ltd. (2005) 7 SCC 791, the Hon’ble Supreme Court held that “where a court has no jurisdiction over the subject-matter of the suit by reason of any limitation imposed by statute, charter or commission, it cannot take up the cause or matter. An order passed by a court having no jurisdiction is a nullity.
10. I have also gone through the case law relied upon by the applicant i.e. Union of India Vs Cars & C. Ex. Settlement Commission, Mumbai 2010 (258) ELT 476 (Boar). Further, 1 have perused the clause (b) of section 127A of the Customs Act, 1962 which defines the term “case” in respect or Settlement of Cases and this definition is reproduced as under:
“(b) “case” means any proceeding under this Act or any other Act for the levy, assessment and collection of custom duty, pending before an adjudicating authority on the date on which an application under sub-section (1) of section 12713 is made:
PROVIDED that when any proceeding is referred back by any court, Appellate Tribunal or any other authority, to the adjudicating authority for a fresh adjudication or decision, as the case may be, then such proceeding shall not be deemed to be a proceeding pending within the meaning of this clause”.
From the above definition of “case” it is observed that the word “Case” under section 127A is defined as a proceeding under this Act or any other Act for the levy, assessment and collection of customs duty, pending before an adjudicating authority on the date on which an application under sub-section (I) of section 12713 is made. Refund as such is a result of a proceeding and hence it can be considered as a “case” under section 127A of the Customs Act, 1962. Further, in terms of provision of 127F of the Custom Act, 1962 “power and procedure of Settlement Commission” is given which reads as follows:
“(1) in addition to the power conferred on the Settlement Commission under chapter V of the Central Excise Act, 1944, it shall have all the powers which are vested in officer of the Customs under this Act or the Rules made thereunder”. Further, as per the provision of section 32(E) of the Central Excise Act, 1944, clause (b) to the first proviso ‘the case’ covers settlement of a Show Cause Notice for recovery of duty issued by the Central Excise Officer have been received by the applicant. The demand and recovery of duty pertains to duty “not-levied” or “not-paid” or “short-levied” or “short-paid” or “erroneously-refunded” as referred in section 11(A) of the Central Excise Act, 1944. The provision of Settlement Commission is to extend a forum for the assesse to apply for settlement of their case in respect oldie demand issued and these provisions intend the settlement of the demand on the basis of their true and complete disclosure of their duty liability. However, under Chapter V-B for Advance Rulings, there no such scope is provided and Advance Ruling is defined as a written decision on any of the questions referred to in section 2811. The only questions on which Advance Ruling can be sought under Section 281-1 are listed in pars 7 (supra), which clearly do not cover Duty Drawback and hence this case does not come under the ambit of advance ruling authority as envisaged in section 28(H)(2) of the Customs Act, 1962. Further, provisions of the Settlement of Cases and Customs Authority for Advance Ruling arc having different aims, intentions and perspectives. However, concept of Advance Ruling is different inasmuch as its scope is very much specific and limited to only those questions reproduced in para 7 (supra).
In view of the above discussions and provisions, I reach the conclusion that the question involved in the present application does not fall within the ambit of any parameter. on which Advance Ruling can be sought.
I, therefore, refrain from passing a ruling on the application inasmuch as there no such jurisdiction vested in this authority as per the mandate of Chapter VB of the Customs Act, 1962.
The application is disposed of accordingly.
