Importer cannot be forced to follow non-beneficial provision: CESTAT Kolkata

Commr. of Customs (Port) Vs Uma Export Ltd. (CESTAT Kolkata)

Held that the importer is allowed to choose the more beneficial provision and cannot be forced to opt for / follow the non-beneficial provision. Accordingly, the goods in question Peas [Pisum Sativum] was present both in Sl No.20 and Sl No.20A of the basic Notification No.50/2017 Cus dated 30.6.2017 and hence assessee eligible to avail benefit of NIL rate of BCD.

Facts- The main issue involved in the present case is that whether during the period under review the goods in question, Pisum Sativum [Peas] falling under Customs Tariff Heading 0713 10 00, are required to be assessed @ NIL rate of BCD in terms of Sl No.20 as claimed by the importers or the goods are required to be assessed @50% rate of BCD in terms of Sl No.20A, as claimed by the Revenue.

Conclusion- In the present case, we observe that during the period 23.12.2017 to 28.02.2018, the goods in question Peas [Pisum Sativum] was present both in Sl No.20 and Sl No.20A of the basic Notification No.50/2017 Cus dated 30.6.2017 till the amendment vide Notification No.29/2018 Cus dated 1.3.2018 was carried out. Applying the case laws cited supra, the importers would be eligible to claim NIL rated BCD and file the consequent Refund claim. Accordingly, we hold that the importers have correctly sought Refund claim on the ground that they were not required to pay 50% BCD in the first place.

The High Courts and Tribunals have been consistently taking the view that the assessee is entitled for the more beneficial Notification, if there are two Notifications on the same issue.

Held that the importer is allowed to choose the more beneficial provision and cannot be forced to opt for / follow the non-beneficial provision.

FULL TEXT OF THE CESTAT KOLKATA ORDER

Since the issue is common in all these 7 Appeals, the Appeals filed by the Revenue and the Appeals filed by the appellants have been taken up together. Special Counsel Sri Mihir Ranjan made his submissions and argued on behalf of Revenue and Advocate Sri Amit Awasthi and others made their submissions and argued on behalf of the 2 Appellants and 5 Respondents.

2. Heard both side. Perused the written submissions made by both the sides.

3. The main grounds of Revenue’s arguments can be summarized as under :

A. Granting of refund of self-assessed Bills of Entry under Section 27 of the Customs Act is guided by the Supreme Court’s decision in the ITC Ltd Vs CCE. The Larger Bench of the Supreme Court in this case has overruled the decisions of Aman Medical and Micromax Informatics. Hence, the granting of the refund relying on these decisions by the Commissioner (Appeals) is erroneous.

B. Importers have not produced any evidence of getting the original assessment modified under Section 149 or Section 154 of the Customs Act 1962. But even filing any application under these Sections would not entitle them to file the refund claim under Section 27 of the Customs Act, 1962.

C. The importers have relied on the case law of Sun Exports to canvass that in case of ambiguity the more beneficial rate would be applicable to them. This interpretation has been rejected by the Hon’ble Supreme Court vide their judgement in the case of Commissioner of Customs (Import) Mumbai Vs Dilip Kumar.

D. The goods in question, Green Peas are correctly classifiable under CET 0713100 and as per the exemption Notification No.50/2017 Cus dated 30.6.2017 as amended by Notification No.84/2017 Cus, the BCD is payable @50%. The importers claim has no merits.

4. The Respondent/Appellant importers have countered the above grounds which are being discussed in the subsequent paragraphs.

5. The issue involved in the present appeals can be summarized as under :

(i) In the present case, the importers, on the ground that they are eligible for the refund claim, have filed the refund claims before the concerned authorities. Whether the present case calls for fulfilment of the condition of filing Appeals against the self-assessed Bills of Entry as a pre-requisite to entertain the refund claim as per the judgement in the ITC case by the Hon’ble Supreme Court being relied on heavily by the Revenue.

(ii) As to whether during the period under review the goods in question, Pisum Sativum [Peas] falling under Customs Tariff Heading 0713 10 00, are required to be assessed @ NIL rate of BCD in terms of Sl No.20 as claimed by the importers [two appellants and five respondents] or the goods are required to be assessed @50% rate of BCD in terms of Sl No.20A, as claimed by the Revenue. The conclusion is required to be drawn based on the joint and cohesive reading and interpretation of Notification No.50/2017 Cus dated 30.6.2017, as amended by Notification No.84/2017 Cus dated 8.11.2017, 93/2017 Cus dated 21.12.2017 and Notification No.29/2018 Cus dated1.3.2018.

(iii) If there is a scope to hold that the product may fall both under Sl No.20 as well as under Sl No.20A during the period under dispute. If so, as to whether the beneficial rate of BCD can be claimed by the importers or the same is not to be extended to them in terms of the Hon’ble Supreme Court’s judgement in the case of Dilip Traders as is being canvassed by the Revenue.

6. Coming to the first issue summarized as (i) above, the Revenue has also vehemently argued on account of the Bills of Entry not being subjected to Appeal proceedings in terms of Section 128 of Customs Act 1962 by the importers. They have cited the Hon’ble Supreme Court’s judgement in the case of ITC Vs CCE Kolkata IV – 2019 (368) SC 216 (SC). It would be important to go through the relevant portions of this judgement, which are extracted below :

38. No doubt about it that the expression which was earlier used in Section 27(1)(i) that “in pursuance of an order of assessment” has been deleted from the amended provision of Section 27 due to introduction of provision as to self-assessment. However, as self-assessment is nonetheless an order of assessment, no difference is made by deletion of aforesaid expression as no separate reasoned assessment order is required to be passed in the case of self-assessment as observed by this Court in Escorts Ltd. v. Union of India &Ors. (supra).

41. It is apparent from provisions of refund that it is more or less in the nature of execution proceedings. It is not open to the authority which processes the refund to make a fresh assessment on merits and to correct assessment on the basis of mistake or otherwise.

42. It was contended that no appeal lies against the order of self-assessment. The provisionsof Section 128 deal with appeals to the Commissioner (Appeals). Any person aggrieved by any decision or order may appeal to the Commissioner (Appeals) within 60 days. There is a provision for condonation of delay for another 30 days. The provisions of Section 128 are extracted hereunder :

“128. Appeals to [Commissioner (Appeals)]. — (1) Any person aggrieved by any decision or order passed under this Act by an officer of customs lower in rank than a [Principal Commissioner of Customs or Commissioner of Customs] may appeal to the [Commissioner (Appeals)] [within sixty days] from the date of the communication to him of such decision or order :

[Provided that the Commissioner (Appeals) may, if he is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of sixty days, allow it to be presented within a further period of thirty days.]

[(1A) The Commissioner (Appeals) may, if sufficient cause is shown, at any stage of hearing of an appeal, grant time, from time to time, to the parties or any of them and adjourn the hearing of the appeal for reasons to be recorded in writing :

Provided that no such adjournment shall be granted more than three times to a party during hearing of the appeal.]

(2) Every appeal under this section shall be in such form and shall be verified in such manner as may be specified by rules made in this behalf.”

43. As the order of self-assessment is nonetheless an assessment order passed under the Act, obviously it would be appealable by any person aggrieved thereby. The expression ^„Any person‟ is of wider amplitude. The revenue, as well as assessee, can also prefer an appeal aggrieved by an order of assessment. It is not only the order of re-assessment which is appealable but the provisions of Section 128 make appealable any decision or order under the Act including that of self-assessment. The order of self-assessment is an order of assessment as per Section 2(2), as such, it is appealable in case any person is aggrieved by it. There is a specific provision made in Section 17 to pass a reasoned/speaking order in the situation in case on verification, self-assessment is not found to be satisfactory, an order of re-assessment has to be passed under Section 17(4). Section 128 has not provided for an appeal against a speaking order but against “any order” which is of wide amplitude. The reasoning employed by the High Court is that since there is no lis, no speaking order is passed, as such an appeal would not lie, is not sustainable in law, is contrary to what has been held by this Court in Escorts (supra).

44. The provisions under Section 27 cannot be invoked in the absence of amendment or modification having been made in the bill of entry on the basis of which self-assessment has been made. In other words, the order of self-assessment is required to be followed unless modified before the claim for refund is entertained under Section 27. The refund proceedings are in the nature of execution for refunding amount. It is not assessment or re-assessment proceedings at all. Apart from that, there are other conditions which are to be satisfied for claiming exemption, as provided in the exemption notification. Existence of those exigencies is also to be proved which cannot be adjudicated within the scope of provisions as to refund. While processing a refund application, re­assessment is not permitted nor conditions of exemption can be adjudicated. Re-assessment is permitted only under Section 17(3)(4) and (5) of the amended provisions. Similar was the position prior to the amendment. It will virtually amount to an order of assessment or re­assessment in case the Assistant Commissioner or Deputy Commissioner of Customs while dealing with refund application is permitted to adjudicate upon the entire issue which cannot be done in the ken of the refund provisions under Section 27. In Hero Cycles Ltd. v. Union of India – 2009 (240) E.L.T. 490 (Bom.) though the High Court interfered to direct the entertainment of refund application of the duty paid under the mistake of law. However, it was observed that amendment to the original order of assessment is necessary as the relief for a refund of claim is not available as held by this Court in Priya Blue Industries Ltd. (supra).

47. When we consider the overall effect of the provisions prior to amendment and post-amendment under Finance Act, 2011, we are of the opinion that the claim for refund cannot be entertained unless the order of assessment or self-assessment is modified in accordance with law by taking recourse to the appropriate proceedings and it would not be within the ken of Section 27 to set aside the order of self-assessment and reassess the duty for making refund; and in case any person is aggrieved by any order which would include self-assessment, he has to get the order modified under Section 128 or under other relevant provisions of the Act.

7. Before we go into the applicability or otherwise of this judgement, the factual details of the present litigation are required to gone into. From the details provided by the appellants / respondents in their submissions, it is seen that all the refunds claims were rejected under different Orders In Original by the Adjudicating authority on the following grounds :

(a) The imported goods ^„Peas‟ were at Sl No.20A of the Notification No.50/2017 Cus dated 30.6.2017 as amended from time to time. Hence, the BCD was correctly charged / discharged @ 50%.

(b) The assessed Bills of Entry were are not challenged before the Commissioner (Appeals), which is required to be done as per Board Circular No.24/2004 dated 18.03.2004.

8. In respect of the refund claims filed by the importers, wherein the issue of non-challenging of the self-assesed Bills of Entry has been raised by the Revenue, the learned counsel appearing on behalf of the importers makes the following submissions :

a) Against the OIOs passed, all these importers filed their Appeals before the Commissioner (Appeals). In respect of 5 importers, the Commissioner (Appeals) allowed their Appeal, thereby allowing their refund claims. Agitated by the same the Revenue is before the Tribunal. In respect of 2 importers, the Commissioner (Appeals) has dismissed their appeals, thereby their refund claims have been rejected. Agitated by these OIAs, the 2 importers are before the Tribunal. Out 2 importers, whose refund claims have been rejected, one importer, ETC Agro Processing (India) Pvt. Ltd. [ETC for short] filed a Writ Petition No. 1848 of 2021 before the Hon’ble Calcutta High Court for a direction regarding maintainability of their Refund Claim. While disposing of the Writ petition vide order dated 5.2.2021, the Hon’ble High Court held and observed that “the pendency of the Writ petition will however not prevent the concerned authority from passing an order in the petitioner’s application for amendments of Bills of Entry, if any, made by the petitioners.”

b) In the light of the said observation of the Hon’ble High Court, the importer ETC pursued the application for amendment of their 4 Bills of Entry under Section 149 of the Customs Act 1962 which they had filed earlier. The Deputy Commissioner of Custom Appraising Group – I, Custom House, Kolkata videos his letter dated 28.04.2021, rejected the application/request for amendment of Bills of Entry. Referring to the Notification No. 93/2017 Cus dated 21.12.2017 which included Pulses other than Tur, Chickpeas or Masoor Lentils under Serial No. 20, the said Deputy Commissioner held that the imported goods yellow/ green peas will not fall under the amended Serial No. 20 of Notification No.50/2017 Cus dated 30.6.2017 attracting NIL rate of Basic Custom Duty. The Deputy Commissioner further held that on the date of importation i.e. 26.02.2018 the Notification No.84/2017 Cus dated 08.11.2017 was in force and the same was not withdrawn and therefore as per Serial No. 20A of the said amending Notification No.84/2017 Cus the rate of duty for peas (PisumSativum) should be @ 50 %. Accordingly, he rejected the re­assessment request. He further held that the Bills of Entry were rightly assessed under Notification Serial No. 20A of Notification No.50/2017 Cus dated 30.6.2017 as amended by Notification No.84/2017 Cus dated 08.11.2017.

c) The learned Advocate submits that in his Order dated 28.4.2021, the Deputy Commissioner did not take any ground to the effect that the importer should have preferred an Appeal under Section 128 before the Commissioner (Appeals) and that no such re-assessment request / appeal cannot be entertained under Section 149 at his level. In this order the issue that the importers should have filed appeal under Section 128 of the Customs Act‟ 1962 for modifying the self-assessment, was not the ground on which the request for re-assessment was rejected. This by itself shows the Customs Department had no objection for entertaining the re­assessment under Section 149 of Customs Act 1962.

d) In this connection, it is respectfully submitted that in the case of the two appellant importers and five respondent importers, they have approached the Custom Authorities for re-assessment under Section 149 of the Customs Act 1962[copies of their request letters have been filed along with Appeal papers]. Those were not been taken up for disposal except in the case of ETC, which was taken up probably only because of the High Court’s Order. The re-assessment requests of others went unresponded, thereby denying Natural Justice. This by itself,should be taken as meeting the criteria of challenging the self-assessed Bills of Entry.

e) In the case of the second appellant, Pratishtha Commercial Pvt Ltd., they had filed a letter towards re-assessment under Section 149 on 12.04.2018. They did not get any response during the next more than 5 months and filed the Refund claim on 28.9.2018 without the re­assessment being carried out by the Customs Authorities. This refund claim was rejected on 15.1.2019 by way of Order in Original on the grounds specified above.

f) Similarly, it is submitted that all the other importers also had filed such re-assessment requests in terms of Section 149. In all such cases, they did not get any response. Such re-assessment requests were neither taken up for disposal, nor any communication was received as to why the requests are not being considered. Therefore, even they had no alternative, but to file the Refund claim without the re-assessment being done.

g) The factual matrix proves that it is not the case where the importers have directly filed the refund claim, without seeking any re-assessment under Section 149. It is on record that such requests have been made through letters which are duly acknowledged by the Department. The learned Advocate submits that the very fact that they have approached the Customs authorities for re-assessment under Section 149, would nullify the Revenue’s claim that the importer has not challenged the assessment of the Bills of Entry. It is erroneous to allege that no evidence was provided towards their attempt to get the Bills of Entry re-assessed under Section 149.

h) The CBIC vide its Circular No. 45/2020 – cus dated 12.10.2020 has advised that where re-assessment is requested after out-of-customs-charge has been given under Section 47 of the Customs Act, the same shall continue to be done by the port assessment group as was done earlier. In the instant case the importers had sought for amendment of the Bills of Entry for the purpose of re-assessment, which would then facilitate the importers to seek claim for refund. Therefore, filing application for amendment of the Bills of Entry for correction of inadvertent mistake or error and consequential passing of orders for re-assessment based on modification! amendment carried out was legal and valid, and the importers are entitled to the amendment and re-assessment.

i) He relied on the decision of the Madras High Court in M/s Hewlett Packard Enterprise India Pvt. Ltd. Vs. Joint Commissioner of Customs – 2021 (375) ELT 488 (Mad) and Usha International Limited Vs. Assistant Commissioner of Customs, Chennai, 2019 (365) ELT 56(MAD),wherein it has been held that in case of correction or inadvertent error, the appropriate remedy would be to seek an amendment to the Bills of Entry and not by way of filing of appeal. There is no legal flaw in the order of self-assessment amenable to appeal but only a factual mistake which can be rectified by way of amendment or correction when the power to make such amendment and or correction of mistakes ! errors has been conferred upon the Custom Authorities. He also relied on the judgement dated January 18, 2021 passed by the Hon’ble High Court, Bombay in the case of Dimension Data India Pvt. Ltd. Vs the Commissioner of Customs & Another, wherein the Supreme Court Judgement of ITC was considered in a detailed manner with regard to assessment and re-assessment.

j) He submits that even the ITC judgement does not make it mandatory to only file an Appeal under Section 128. The words used at Para 43 of the Judgment are “The provisions under Section 27 cannot be invoked in the absence of amendment or modification having been made in the bill of entry on the basis of which self-assessment has been made. In other words, the order of self-assessment is required to be followed unless modified before the claim for refund is entertained under Section 27, and Para 47 “and in case any person is aggrieved by any order which would include self-assessment, he has to get the order modified under Section 128 or under other relevant provisions of the Act. Thus the judgement only speaks of ‘Modification’ to be carried out to the self-assessed Bill of Entry ‘modified under Section 128 or under other relevant provisions of the Act’. Therefore, there is absolutely no bar for the importer to seek re-assessment under Section 149.

k) Without prejudice to the submissions that the importers have fully met the criteria of challenging the assessment by making a request for re­assessment, the Advocate also submits that during the period when the refund claims were filed, adjudicated and OIAs were passed, the appellants were fully supported by the decided case laws of various High Courts which were in force. At the time of filing the refund claims the importers followed the procedure as approved and considered as proper by various High Courts. The Board‟s Circular dated 18.03.2004 was time and again held as not applicable particularly in the case of self –assessed Bills of Entry.

l) In this respect, reliance has been placed on the following case laws :

a) Delhi High Court judgement dated 16.09.2009 in the case of AMAN MEDICAL PRODUCTS LTD. Versus COMMISSIONER OF CUSTOMS, DELHI (2010 (250) E.L.T. 30(Del.)

b) Delhi High Court judgement dated 26.02.2016 in the case of MICROMAX INFORMATICS LTD. Versus UNION OF INDIA (2016 (335) E.L.T. 446(Del.)

c) Bombay High Court judgement dated 30.11.2018 in the case of MICROMAX INFORMATICS LTD. Versus UNION OF INDIA (2019 (369) E.L.T. 543 (Bom.)

d) Tribunal (Mumbai) order dated 27.06.2016 in the case of C.C.(NS-III), JNCH, Nava-Sheva versus Physical Research Laboratory (2017 (357) E.L.T. 475 (Tri- Mumbai)

e) Tribunal (Bangalore) order dated 24.10.2017in the case of Excel glasses Limited versus Commissioner of Customs, Cochin (2018 (360) E.L.T. 953 (Tri- Bang.)

f) Tribunal (Mumbai) order dated 06.03.2017 in the case of Zenith Computers Limited versus Commissioner of Customs, Goa (2017 (358) E.L.T. 1125 (Tri- Mumbai)

g) Tribunal (Kolkata) order dated 23.08.2016 in the case of Liebherr India Private Limited versus Commissioner of Customs (Port), Kolkata (2017 (358) E.L.T. 656 (Tri- Kolkata)

m) Further he submits that the Customs Department has been issuing Public Notices on the issue of reassessment and refunds. In this regard kind reference is invited to the Public Notice No. 65/2018 dated 11.09.2018 issued by the Chennai Customs. It has been clarified in the said Public Notice that the refund claim should be forwarded to the appraising group and that based on their report for re-assessment, the refund claim is to be allowed or rejected. In the instant case of importers, the revenue should have followed this procedure particularly taking into account that importers have also filed their request letters for re­assessment by way of applications under Section 149 of the Customs Act1962. Therefore, the principle of natural justice was compromised in the instant case of importers.

9. After going through the factual details submitted by the appellants/respondents, the factual details can be summarized as under:

(a) Initially they have self-assessed the Bills of Entry by paying BCD of 50% for the Peas [PisumSativum], in terms of Sl No.20A of Notification No.50/2017 Cus dated 30.6.2017 as amended by Notification No.84/2017 Cuss dated 8.11.2017.

(b) After Notification No.50/2017 Cus dated 30.6.2017 was amended by way of Notification No.29/2018 Cus dated 1.3.2018, they have noticed that the product was mentioned both at Sl No.20 as well as at Sl No.20A.

(c) As per the interpretation of the importesr, they would be eligible to seek the refund of 50% BCD paid by them.

(d) At that point of time, High Courts and Tribunals have been taking consistent view that in case of self-assessment, no Appeal or re-assessment is required and the refund claim can be directly lodged. However, the Board Circular No.24/2004 dated 18.03.2004 specified that re-assessment is pre-requisite if the refund claim is to be entertained.

(e) The importers have filed their applications for re­assessment in terms of Section 149 of the Customs Act 1962 before the Appraising Authorities. While 6 of the importers have done so on their own, one party [ETC] had approached the High Court by way of Writ Petition. After the Writ Petition was disposed off by the High Court, they have filed their request letter under Section 149. [Page No.57-64 of the Synopsis]

(f) The request of ETC was rejected on the ground that the goods were correctly assessed for BCD in terms of Sl No.20A of the Notification No.50/2017 Cus dated 30.6.2017.

(g) The rejection was not on the count that the importer should have filed an Appeal in terms of Section 128 of the Customs Act 1962 against the self-assessed Bills of Entry.

(h) Therefore, here it is case of direct admittance by the Revenue that the re-assessment request under Section 149, is in the nature of Appeal and the same was rejected. Therefore, in the case of ETC, the Revenue is precluded from taking the stand that they have not filed any appeal so as to reject the refund claim.

(i) In case of 6 importers, even after receiving their request letter, the Appraising Dept. neither allowed their request, nor rejected the same but simply kept them in abeyance. Principles of natural justice requires the Appraising Dept. to respond to the re­assessment request. If the same is not being entertained on the ground that the appeal has to be filed before Commissioner (Appeals) in terms of Section 128, the applicant is required to be informed of the same. The Dept. cannot simply keep quiet allowing the time limit to file the refund to expire. As observed supra, no objection on this count was raised in the Order passed in respect of of ETC‟s re-assessment request made under Section 149. In respect of the balance 6 importers, against their request for re-assessment under Section 149, neither the same was rejected nor were they directed to file the Appeal in terms of Section 128.

10. During the period in question, the following decisions of the High Court and Tribunals were clearly holding that no re-assessment was required :

AMAN MEDICAL PRODUCTS LTD. Vs COMMISSIONER OF CUSTOMS, DELHI 2010 (250) E.L.T. 30 (Del.)

6. We, therefore, answer the question framed by holding that the refund claim of the appellant was maintainable under Section 27 of the Customs Act and the non-filing of the appeal against the assessed bill of entry does not deprive the appellant to file its claim for refund under Section 27 of the Customs Act, 1962 and which claim will fall under clause (ii) of sub-section (1) of Section 27.

MICROMAX INFORMATICS LTD. Vs UNION OF INDIA 2016 (335) E.L.T. 446 (Del.)

13. As far as the present case is concerned, there was indeed no assessment order as such passed by the customs authorities. Although under Section 2(ii) of the Act, the word ‘assessment’ includes a self-assessment, the clearance of the goods upon filing of the B/E and payment of duty is not per se an ‘assessment order’ in the context of Section 27(1)(i) as it stood prior to 8th April, 2011, particularly if such duty has not been paid under protest. In any event, after 8th April, 2011, as noticed hereinbefore, as long as customs duty or interest has been paid or borne by a person, a claim for refund made by such person under Section 27(1) of the Act as it now stands, will have to be entertained and an order passed thereon by the authority concerned even where an order of assessment may not have reviewed or modified in appeal.

MICROMAX INFORMATICS LTD. Vs UNION OF INDIA 2019 (369) E.L.T. 543 (Bom.)

27. It can thus be seen that there have been significant statutory amendments in Sections 17 and 27 by virtue of the Finance Act, 2011. Earlier procedure of filing of bill of entry by importer and its assessment by the competent authority has been replaced by the self-assessment to be made by the importer while filing the bill of entry and the competent authority only passing a speaking order of reassessment in case where he finds that the self assessment made by the importer is not correct. It is therefore, that even in Section 27 of the Act, the procedure for claiming refund has been suitably modified. Instead of referring to claim of refund of duty or interest paid in pursuance of the order of assessment or borne by him, the amended Section 27 merely refers to the claim of refund of duty or interest paid or borne by the refund claimant.Thus, earlier reference to the refund of duty or interest paid pursuant to an order of assessment is now deleted. This would be in consonance with the changed procedure for clearance of imported goods as contained in Section 17 of the Act.

30 ………….. We may also record that the Counsel for the Department had referred to Section 149 of the Act and contended that it was open for the Petitioner to have bill of entries amended. Section 149 of the Act provides that a proper officer may at his discretion authorize a document after it is presented in the Custom House to be amended.

ZENITH COMPUTERS LTD. Vs COMMISSIONER OF CUSTOMS, GOA 2017 (358) E.L.T. 1125 (Tri. – Mumbai)

4.2 Another ground for denying the refund by the Commissioner (Appeals) is that that the appellant have not challenged the assessment order and, hence, they would not be eligible for refund of duty paid. We find that in the regime of self-assessment, the scope for grievance and filing of appeal is non-existent, as non-filing of appeal against the assessment of the Bill of Entry does not deprive the assessee the right to file refund as has been held by the Tribunal in the case of Commissioner v. Physical Research Laboratory – 2016-TIOL-3037-CESTAT-MUM = 2017 (357) ELT 475 (Tri. Mum.). We further find that filing of refund claim itself is challenge of Bills of Entry.

11. The Aman Medical Product decision pertains to pre-amendment provisions and has been held as not correct by the Apex Court in the ITC case. The Micromax decisions of 2016 and 2019 considered the amended provisions of Section 27 to arrive at the decisions. During the period under dispute the importers were without doubt covered by these decisions since the ITC judgement was rendered by the Supreme Court subsequently.

12. In these decisions, it was held in respect of self-assessed Bills of Entry, the importers were not even required to file any application for re-assessment as was being directed vide the Board Circular 24/2004 Cus dated 18.3.2004. These decisions had effectively overruled the Board Circulars. Further it is seen in the second Micromax case, the Revenue itself has adduced argument to the effect that the importer should have resorted to Section 149 for re-assessment of the self-assessed Bills of Entry. In the present case, by documentary evidence the importers have proved that they have made the efforts to get the self-assessed Bills of Entry re-assessed as per the factual matrix observed above.

13. It leads us to the issue as to whether the re-assessment request under Section 149 would meet the requirement of filing of Appeal, because the Hon’ble Supreme Court in the ITC case cited supra has held that before the refund claim is entertained, Appeal has to be filed against the self-assessed Bills of Entry. This issue, including the Supreme Court’s ruling in the case of ITC has been gone into in the following case :

DIMENSION DATA INDIA PVT. LTD. Vs COMMISSIONER OF CUSTOMS 2021 (376) E.L.T. 192 (Bom.)

12. In reply, learned counsel for the petitioner has distinguished the decision of the Supreme Court in ITC Limited (supra) and submits that Central Government itself had issued notification way back on 02.05.2012 being Notification No. 40/2012 which was amended in the year 2017 by empowering offers of the rank of Deputy Commissioner or Assistant Commissioner of Customs to exercise functions under section 149 of the Customs Act after grant of order for clearance of goods under section 47 or section 51 of the said Act as the case may be. From the compilation, he has pressed into service decision of the Kerala High Court in GTN Textiles Limited vs. Union of India and that of the Madras High Court in Usha International Ltd. Vs. Assistant Commissioner of Customs, Chennai 2019 (365) E.L.T. 56 (Mad) in support of his contention that in a case of this nature, it is not necessary to prefer appeal when power to make corrections of inadvertent mistakes or errors leading to re-assessment has been conferred upon the authorities. Finally, he places reliance on the decision of the Madras High Court in M/s Hewlett Packard Enterprise India Private Limited Vs. Joint Commissioner of Customs,5 in which case it has been specifically held that in a case of this nature, appropriate remedy is not that of appeal but rectification of an error apparent on the face of the record which existed at the time of clearance of the goods

15.2. Thereafter, comes sub-section (4). Sub-section (4) is relevant. It empowers the proper officer to go for re- assessment if he finds on verification etc. that self- assessment was not done correctly. The same is extracted hereunder:

“(4) Where it is found on verification, examination or testing of the goods or otherwise that the self- assessment is not done correctly, the proper officer may, without prejudice to any other action which may be taken under this Act, re-assess the duty leviable on such goods.”

14. Thus, the scheme of section 17 from the perspective of the importer (since in this case we are dealing with imports) is that an importer upon entering his imported goods is required to self-assess the duty leviable on such imported goods. This is subject to verification and examination by the proper officer. If upon verification or examination etc. the proper officer finds that the self-assessment is not done correctly, he may re-assess the duty leviable on such goods. In a case where re-assessment is contrary to self-assessment and where the importer does not confirm his acceptance of such re-assessment, the proper officer shall pass a speaking order on the re- assessment. Therefore, it is quite evident that though duty is cast upon an importer to self-assess the customs duty leviable on the imported goods, a corresponding duty is also cast upon the proper officer to verify and examine such self-assessment. Such verification and examination have to be done in good faith and in the process of verification or examination if the proper officer finds that there is misclassification of tariff head or wrong classification of tariff head of the imported goods leading to lesser levy of customs duty or excess levy of customs duty, he has the power and authority under sub-section (4) to make re­assessment and re-assess the duty leviable on such goods.

15. From a careful analysis of section 149, we find that under the said provision a discretion is vested on the proper officer to authorise amendment of any document after being presented in the customs house. However, as per the proviso, no such amendment shall be authorised after the imported goods have been cleared for home consumption or warehoused, etc. except on the basis of documentary evidence which was in existence at the time the goods were cleared, deposited or exported, etc. Thus, amendment of the Bill of Entry is clearly permissible even in a situation where the goods are cleared for home consumption. The only condition is that in such a case, the amendment shall be allowed only on the basis of the documentary evidence which was in existence at the time of clearance of the goods.

16. Having noticed and analysed the relevant legal provisions, we may now turn to the decision of the Supreme Court in ITC Ltd. Vs. Commissioner of Central Excise, Kolkata IV (supra). The question which arose before the Supreme Court was whether in the absence of any challenge to the order of assessment in appeal, any refund application against the assessed duty could be entertained.

17. From the question itself, it is clear that the issue before the Supreme Court was not invocation of the power of re-assessment under section 17(4) or amendment of documents under section 149 or correction of clerical mistakes or errors in the order of self-assessment made under section 17(4) by exercising power under section 154 vis-a-vis challenging an order of assessment in appeal. The issue considered by the Supreme Court was whether in the absence of any challenge to an order of assessment in appeal, any refund application against the assessed duty could be entertained. In that context Supreme Court observed in paragraph 43 as extracted above that an order of self-assessment is nonetheless an assessment order which is appealable by “any person” aggrieved thereby. It was held that the expression “any person” is an expression of wider amplitude. Not only the revenue but also an assessee could prefer an appeal under section 128. Having so held, Supreme Court opined in response to the question framed that the claim for refund cannot be entertained unless order of assessment or self-assessment is modified in accordance with law by taking recourse to appropriate proceedings. It was in that context that Supreme Court held that in case any person is aggrieved by any order which would include an order of self-assessment, he has to get the order modified under section 128 or under other relevant provisions of the Customs Act (emphasis ours).

18. In the instant case, petitioner has not sought for any refund on the basis of the self-assessment. It has sought re-assessment upon amendment of the Bills of Entry by correcting the customs tariff head of the goods which would then facilitate the petitioner to seek a claim for refund.

19. Madras High Court in M/s. Hewlett Packard Enterprise India Private Limited (supra) correctly held that in a case of correction of inadvertent error, the appropriate remedy would be seeking an amendment to the Bills of Entry and not fling of appeal because there is no legal flaw in the order of self-assessment amenable to appeal but only a factual mistake which can be rectified by way of amendment or correction. Such correction or amendment has been sought for by the petitioner on the basis of documents which were already in existence at the time of release of the goods for home consumption.

20. The expression “mistake” appearing in section 154 of the Customs Act may be defined as something done unintendedly or through inadvertence. The section itself says that the error in any decision or order should be due to any accidental slip or omission. Moreover, it can be a mistake of law or a mistake of fact. In all cases it need not be an arithmetical error alone. It may connote errors which can be discerned upon due verification. Having said so, we may also indicate that power to amend documents available under section 149 of the Customs Act read with correction of clerical or arithmetical mistakes or errors in orders due to accidental slip or omission under section 154 thereof is different and distinct from the appellate power exercised under section 128 of the Customs Act. The power of amendment or correction, as the case may be, is vested on the same officer who had passed the initial order or an officer of equivalent rank. On the other hand, appellate jurisdiction is directed to correct decisions or orders passed by an inferior or lower authority. By its very nature an appellate authority is superior to the authority which had passed the order appealed against.

21. This judgement after considering the Supreme Court‟s decision of ITC with detailed analysis, clearly holds that the self-assessed Bills of Entry can be entertained for re-assessment under Section 149. It holds that there is no specific requirement for an Appeal under Section 128 and relies on the decision of ITC. Against this decision of Bombay High Court, the Revenue filed SLP, which has been dismissed by the Supreme Court as reported in –Commissioner v. Dimension Data India Private Ltd. – 2022 (379) E.L.T. A39 (S.C.)

22. Further, even in the ITC case, the Supreme Court has held

“…… .in case any person is aggrieved by any order which would include self-assessment, he has to get the order modified under Section 128 or under other relevant provisions of the Act”. Therefore, it is clear that this judgement does not hold that it is mandatory to file an Appeal under Section 128 to get challenge the self-assessment, as is being canvassed by the Revenue in these appeals. Since the words used are ^„or under other relevant provisions of the Act‟, the Bombay HighCourt has heldthat the re-assessment is permissible under Section 149 and is required to be taken as fulfilment of Appeal condition specified in the ITC for filing the refund claims.

23. To summarize our observations on the applicability of ITC case canvassed by the Revenue :

(a) During the period under dispute, the ITC judgement was not rendered. In respect of self-assessed Bills of Entry, the importers were guided by the then prevailing High Court and Tribunals decision, which held that no re-assessment is required. The Board Circular of 2004 had no legal validity since these decisions of High Courts and Tribunals held that no Appeal is required to be filed in respect of self-assessed Bills of Entry.

(b) The factual matrix proves that the importers have sought re-assessment under Section 149 as discussed in detail supra. In the only Order passed in respect of such a request, no ground was taken to the effect that against the self-assessed Bill of Entry only Appeal only under Section 128 should have been preferred.

(c) As discussed supra, the importers have filed their request for re-assessment in terms of Section 149 [Page Nos.86 to 98 of the Synopsis]. In one case the request was rejected and in other cases, the Revenue did not respond. Hence, it is not a case where the importers have not sought to get the self-assessed Bills of Entry re-assessed.

(d) In the Micromax 2019, the Revenue itself has argued that the importer could have got the self-assessed Bill of Entry re­assessed under Section 149.

(e) The Mumbai High Court and Madras High Court have held that Section 149 can be used for re-assessment of self-assessed Bills of Entry. The SLP filed against the Mumbai High Court’s decision has been dismissed by the Supreme Court. Hence, this issue has reached finality.

24. In view of these observations, we hold that in the present case the judgement of Hon’ble Supreme Court in the ITC case is not applicable. Therefore, we reject the stand of the Revenue that the appellants have not filed any appeal against the self-assessed Bills of Entry.

25. The next issue to be addressed is about the rate of BCD applicable for the Pisum Sativum during the period under in question. The Learned Advocate submits that the correct applicability of the Serial Number of the Basic Notification No.50/2017 Cus dated 30.6.2017 is to be interpreted by way of proper reading of the Notifications issued in this regard. The following Table captures the amendments carried out to this Notification, which are relevant to the present Appeals :

26. The Notification No.50/2017 Cus dated 30.6.2017 is an Exemption and Effective Notification for Basic and the IGST for specified goods falling under Chapter 1 to 98 with or without any conditions attached. As can be seen from the above Table, till 30.6.2017 admittedly all pulses including Peas [Pisum Sativum] except ^„Tur’, are classified under Sl No.20 of the Notification No.50/2017 Cus dated 30.6.2017 and are eligible for NIL rate of BCD. Vide Notification No.84/2017 Cus dated 8.11.2017, a new entry 20A was added after Sl No.20. Under Sl No.20 it has been specifically mentioned that the BCD in case of ^„Pulses except peas [Pisum Sativum] and Tur’ would be NIL and the specifically inserted Sl No.20A Peas [Pisum Sativum] carries the BCD @50%. Therefore, it is beyond doubt that from 8.11.2017, Peas (without doubt being ^„Pulses), cannot be assessed @ NIL rate of BCD and have to be assessed @ 50% BCD only. On this issue, there is full clarity and both sides agree that BCD applicable is @ 50%. The amendment carried out vide Notification No. 93/2017Cus dated 23.12.2017 expanded the exceptions under the ^„Pulses‟. After this, the entry reads as ^„Pulses [Other than Tur, Chikpeas or Masoor (lentils)]‟ and the relevant BCD is @ NIL. Sl No.20A continued to remain as it is with BCD @50%. After this, one more amendment was carried out vide Notification No.29/2018 Cus dated 1.3.2018. Here the scope of Sl No.20 was further expanded to read as “Pulses [Other than Peas (Pisum Sativum), Tur, Chikpeas or Masoor (Lentils)” with BCD @ NIL. The Sl No.20A continued to remain as it is with BCD @50%.

27. The learned Advocate submits that while the amendment vide Notification No. 93/2017Cus dated 23.12.2017 on its own does not grant the NIL rate of BCD to Peas [Pisum Sativum] with Sl No.20A being in place without any change, the further amendment vide Notification No.29/2018 Cus dated 1.3.2018 by bringing in Peas (Pisum Sativum) under the exceptions under Sl No.20 has given the scope to allow this product to be classified both under Sl No.20 and Sl No.20A during the period 23.12.2017 to 28.2.2018 [the intervening period]. The very fact that amendment was carried out on 1.3.2018 to bring in Peas (Pisum Sativum) under the exclusion list of Pulses under Sl No.20, clarifies that the goods were classifiable both under Sl No.20 and 20A during the period 23.12.2017 to 28.2.2018. If Sl No.20 and Sl.20A were to be two different and independent entities, then there would have been no necessity to carry out the amendment on 1.3.2018. It can be concluded that only in order to ensure that the product is to be assessed as per Sl No.20A, the amendment was carried out on 1.3.2018. If this amendment was not carried out, there is nothing to infer from the entries Sl No.20 and Sl No.20A which on their own may allow the importer to directly go to Sl No.20 for assessement under NIL rate of BCD. This amendment has in fact created the situation of there being the presence of two parallel simultaneous entries for the product Peas [Pisum Sativum] during the period 23.12.2017 to 28.2.2018.

28. The Commissioner (Appeals) who has granted the refunds in respect of 5 importers (Respondents herein) has come to a conclusion that in view of the amendment carried out to Notification No.50/2017 Cus dated 30.6.2017 vide Notification No.29/2018 dated 1.3.2018, that the goods in question fell under the Sl No.20 of the Notification No.50/2017 Cus dated 30.6.2017. On the other hand the Commissioner (Appeals) who has rejected the refunds in respect of 2 importers (Appellants herein) has held that at that only Sl 20 A was applicable with there being a direct entry in respect of Peas [PisumSativum]. Thus it is seen that within the Department there prevails two different views on the same issue.

29. The importers however, have argued that the very amendment carried out vide Notification No.29/2018 Cus dated 1.3.2018, effectively nullifies the entry Sl No.20A of the earlier Notification No. 93/2017Cus dated 23.12.2017 and there is no need to specifically notify withdrawal of Sl No.20A. They have placed reliance on the Supreme Court judgement in the case of Commissioner of Sales Tax U P Vs Agra Belting Works India – 1987 (32) ELT 251 (SC), wherein deciding as to whether there is any requirement to recall [withdraw] the earlier notification of not, the Hon‟ble Supreme Court held as under :

“6. As has been pointed out above, Section 3 is the charging provision; Section 3A authorizes variation of the rate of tax and Section 4 provides for exemption from tax. All the three sections are parts of the taxing scheme incorporated in the Act and the power both under section 3A as also under Section 4 is exercisable by the State Government only. When after a Notification under Section 4 granting exemption from liability, a subsequent Notification under Section 3A prescribes the rate of tax, it is beyond doubt that the intention is to withdraw the exemption and make the sale liable to tax @ prescribed in the Notification. As the power both for grant of exemption and the variation of the rate of tax vests in the State Government and it is not the requirement of the statute that a Notification of Recall of Exemption is a condition president to imposing tax @ any prescribed rate by a valid notification under Section 3A, we see no force in the contention of the assesses which has been upheld by the High Court. In fact, the second notification can easily be treated as a combined notification- both for withdrawal of exemption and also for providing higher tax when power for both the operations vests in the State and the intention to levy the tax is clear we see no justification for not giving effect to the second notification.”

30. While there is some force in the above argument, but going by the facts and number of amendments carried out to the basic Notification No.50/2017 Cus dated 30.6.2017, a harmonious reading of these Notifications does not suggest that Sl No.20A was withdrawn at any point of time but was in fact co-existing with Sl No.20.

31. In the present appeal even in the Revenue’s submissions at Para B3 (Page 31), they submit ^„Undeniably Notification No. 93/2017Cus has created ambiguity regarding the benefit in exemption Notification about imported Peas (Pisum Sativum]‘ . They have placed reliance on the case law of Commissioner of Customs (Imports) Mumbai VsDilip Kumar and company to argue that benefit of beneficial rate cannot be granted unless all the conditions of the exemption Notification is fulfilled completely. The relevance of Dilip Kumar case is being discussed in the subsequent paragraphs.

32. Therefore, we are not in agreement with the importers’ argument that Sl No.20A was done away with during the period 23.12.2017 to 28.2.2018. As a matter of fact, we find that during the period under dispute, in view of the amendment carried out under Notification No.29/2018 Cus dated 1.3.2018, it is amply clear that the product under dispute fell both under for Sl No.20 and Sl No.20A during the period under question. If it were not to be so, we see no reason for the Revenue to bring in the amendment by way of this Notification No.29/2018 Cus dated 1.3.2018 at all.

33. Now having come to a conclusion that the goods in question fall both under Sl No.20 as well under Sl No.20A during the period in question, it would be important to go through the relevant case law on this issue which were relied upon by the Commissioner (Appeals) who granted the refund claims :

SHARE MEDICAL CARE Vs UNION OF INDIA – 2007 (209) ELT 321 (SC)

15. From the above decisions, it is clear that even if an applicant does not claim benefit under a particular notification at the initial stage, he is not debarred, prohibited or estopped from claiming such benefit at a later stage.

16. In the instant case, the ground which weighed with the Deputy Director General (Medical), DGHS for non-considering the prayer of the appellant was that earlier, exemption was sought under category 2 of exemption notification, not under category 3 of exemption notification and exemption under category 2 was withdrawn. This is hardly a ground sustainable in law. On the contrary, well settled law is that in case the applicant is entitled to benefit under two different Notifications or under two different Heads, he can claim more benefit and it is the duty of the authorities to grant such benefits if the applicant is otherwise entitled to such benefit. Therefore, non-consideration on the part of the Deputy Director General (Medical), DGHS to the prayer of the appellant in claiming exemption under category 3 of the notification is illegal and improper. The prayer ought to have been considered and decided on merits. Grant of exemption under category 2 of the notification or withdrawal of the said benefit cannot come in the way of the applicant in claiming exemption under category 3 if the conditions laid down thereunder have been fulfilled. The High Court also committed the same error and hence the order of the High Court also suffers from the same infirmity and is liable to be set aside.

20. In our opinion, the decision in Mediwell Hospital would not take away the right of the appellant to claim benefit under para 3 of the Table of exemption notification. If the appellant is not entitled to exemption under para 2, it cannot make grievance against denial of exemption. But if it is otherwise entitled to such benefit under para 3, it cannot be denied either. The contention of the authorities, therefore, has no force and must be rejected.

COMMISSIONER OF C. EX., MEERUT Vs MODI XEROX LTD 2012 (275) E.L.T. 406 (All.)

15. It has been held (see below for citations) that where there are two exemption notifications that cover the goods in question, the assessee is entitled to the benefit of the exemption notification which gives him greater relief.

16. If the goods are covered by the two Notifications, then as held by the courts, it is open to an assessee to choose any one of them. He may not choose one notification over the other if there is any specific or implied bar in the other notification.

SKY GOURMET PVT. LTD. Vs CST BANGALORE 2009 (14) S.T.R. 777 (Tri. – Bang.)

5. Further, the benefit of Notification No. 12/2003-S.T. is available to all the services. There is an exclusion of the value of the goods sold during their rendering of service. In this lease, it is very clear in view of the separate invoices raised that the food/beverages supplied have been separately paid for. There is documentary evidence for the cost of such goods sold during their rendering of service. In view of the Article 366(29A) read with provisions of the Karnataka VAT Act, 2005. It is very clear that in this ‘Outdoor Catering Service’, the food supplied should be treated as ‘sale of goods’ and for the sale of goods, VAT has already been paid. Therefore this cannot be charged to the service tax in view of the ratio of the Supreme Court’s decision in M/s. BSNL case. Further the benefit of Notification No. 12/2003-S.T. is squarely applicable in this case and the Commissioner has simply brushed aside. We are also in agreement that the appellant’s contention that when two notifications are available, it is the appellant always has an option to choose a more beneficial Notification. There is no reason why the benefit of Notification No. 12/2003 is not available to the appellants. In these circumstances, we do not find much merit in the impugned order and the same is set aside. The appellant is not liable to pay the differential duty. Hence all the penalties are set aside. Thus we allow the appeal with consequential relief. Hence the appeal and the cross-objection are disposed of in the above manner.

34. The Hon‟ble Supreme Court in the case of Share Medical Care cited supra has held that on discovery of a more beneficial Notification, the same can be claimed by the assesse. There is nothing on record to suggest that subsequently any contrary decision was taken by the Supreme Court in any other case. Further, the High Courts and Tribunals have been consistently taking the view that the assessee is entitled for the more beneficial Notification, if there are two Notifications on the same issue. The ratio laid down in these case laws are squarely applicable to the facts of the present proceedings. In the present case, we observe that during the period 23.12.2017 to 28.02.2018, the goods in question Peas [Pisum Sativum] was present both in Sl No.20 and Sl No.20A of the basic Notification No.50/2017 Cus dated 30.6.2017 till the amendment vide Notification No.29/2018 Cus dated 1.3.2018 was carried out. Applying the case laws cited supra, the importers would be eligible to claim NIL rated BCD and file the consequent Refund claim. Accordingly, we hold that the importers have correctly sought Refund claim on the ground that they were not required to pay 50% BCD in the first place.

35. Coming to the third issue, Revenue has also taken the alternate argument that even if it is taken that the goods in question fall under both Sl No.20 and Sl No.20A of the Notification No.50/2017 Cus dated 30.6.2017 after the amendments, still the case law of CC (Imports) Mumbai Vs Dilip Kumar & Company – 2018 (361) ELT 577 (SC) would be applicable. As per the Revenue, this judgement of the Hon‟ble Supreme Court specifies that if any exemption is claimed, the person so claiming has to prove that all the conditions set therein at the Notifications have been fulfilled. Therefore, it would be important to go through the relevant extract of this Judgement, which is reproduced below :

19. The well-settled principle is that when the words in a statute are clear, plain and unambiguous and only one meaning can be inferred, the Courts are bound to give effect to the said meaning irrespective of consequences. If the words in the statute are plain and unambiguous, it becomes necessary to expound those words in their natural and ordinary sense. The words used declare the intention of the Legislature. In Kanai Lal Sur v. ParamnidhiSadhukhan, AIR 1957 SC 907, it was held that if the words used are capable of one construction only then it would not be open to the Courts to adopt any other hypothetical construction on the ground that such construction is more consistent with the alleged object and policy of the Act.

25. We are not suggesting that literal rule de hors the strict interpretation nor one should ignore to ascertain the interplay between ‘strict interpretation’ and ‘literal interpretation’. We may reiterate at the cost of repetition that strict interpretation of a statute certainly involves literal or plain meaning test. The other tools of interpretation, namely contextual or purposive interpretation cannot be applied nor any resort be made to look to other supporting material, especially in taxation statutes. Indeed, it is well-settled that in a taxation statute, there is no room for any intendment; that regard must be had to the clear meaning of the words and that the matter should be governed wholly by the language of the notification. Equity has no place in interpretation of a tax statute. Strictly one has to look to the language used; there is no room for searching intendment nor drawing any presumption. Furthermore, nothing has to be read into nor should anything be implied other than essential inferences while considering a taxation statute.

27. Now coming to the other aspect, as we presently discuss, even with regard to exemption clauses or exemption notifications issued under a taxing statute, this Court in some cases has taken the view that the ambiguity in an exemption notification should be construed in favour of the subject. In subsequent cases, this Court diluted the principle saying that mandatory requirements of exemption clause should be interpreted strictly and the directory conditions of such exemption notification can be condoned if there is sufficient compliance with the main requirements. This, however, did not in any manner tinker with the view that an ambiguous exemption clause should be interpreted favouring the revenue. Here again this Court applied different tests when considering the ambiguity of the exemption notification which requires strict construction and after doing so at the stage of applying the notification, it came to the conclusion that one has to consider liberally.

28. With the above understanding the stage is now set to consider the core issue. In the event of ambiguity in an exemption notification, should the benefit of such ambiguity go to the subject/assessee or should such ambiguity should be construed in favour of the revenue, denying the benefit of exemption to the subject/assessee? There are catena of case laws in this area of interpretation of an exemption notification, which we need to consider herein. The case of Commissioner of Inland Revenue James Forrest, [(1890) 15 AC 334 (HL)] – is a case which does not discuss the interpretative test to be applied to exemption clauses in a taxation statute – however, it was observed that ‘it would be unreasonable to suppose that an exemption was wide as practicable to make the tax inoperative, that it cannot be assumed to have been in the mind of the Legislature’ and that exemption ‘from taxation to some extent increased the burden on other members of the community’. Though this is a dissenting view of Lord Halsbury, LC, in subsequent decisions this has been quoted vividly to support the conclusion that any vagueness in the exemption clauses must go to the benefit of the revenue. Be that as it is, in our country, at least from 1955, there appears to be a consistent view that if the words in a taxing statute (not exemption clause) are ambiguous and open to two interpretations, the benefit of interpretation is given to the subject and it does not matter if the taxpayer escapes the tax net on account of Legislatures’ failure to express itself clearly (See the passage extracted hereinabove from Kesoram Industries case (supra)).

40. After considering the various authorities, some of which are adverted to above, we are compelled to observe how true it is to say that there exists unsatisfactory state of law in relation to interpretation of exemption clauses. Various Benches which decided the question of interpretation of taxing statute on one hand and exemption notification on the other, have broadly assumed (we are justified to say this) that the position is well-settled in the interpretation of a taxing statute : It is the law that any ambiguity in a taxing statute should enure to the benefit of the subject/assessee, but any ambiguity in the exemption clause of exemption notification must be conferred in favour of revenue – and such exemption should be allowed to be availed only to those subjects/assesses who demonstrate that a case for exemption squarely falls within the parameters enumerated in the notification and that the claimants satisfy all the conditions precedent for availing exemption. Presumably for this reason the Bench which decided Surendra Cotton Oil Mills case (supra) observed that there exists unsatisfactory state of law and the Bench which referred the matter initially, seriously doubted the conclusion in Sun Export Case (supra) that the ambiguity in an exemption notification should be interpreted in favour of the assessee.

41. After thoroughly examining the various precedents some of which were cited before us and after giving our anxious consideration, we would be more than justified to conclude and also compelled to hold that every taxing statute including, charging, computation and exemption clause (at the threshold stage) should be interpreted strictly. Further, in case of ambiguity in a charging provisions, the benefit must necessarily go in favour of subject/assessee, but the same is not true for an exemption notification wherein the benefit of ambiguity must be strictly interpreted in favour of the Revenue/State.

43. There is abundant jurisprudential justification for this. In the Governance of rule of law by a written Constitution, there is no implied power of taxation. The tax power must be specifically conferred and it should be strictly in accordance with the power so endowed by the Constitution itself. It is for this reason that the Courts insist upon strict compliance before a State demands and extracts money from its citizens towards various taxes. Any ambiguity in a taxation provision, therefore, is interpreted in favour of the subject/assessee. The statement of law that ambiguity in a taxation statute should be interpreted strictly and in the event of ambiguity the benefit should go to the subject/assessee may warrant visualizing different situations. For instance, if there is ambiguity in the subject of tax, that is to say, who are the persons or things liable to pay tax, and whether the revenue has established conditions before raising and justifying a demand. Similar is the case in roping all persons within the tax net, in which event the State is to prove the liability of the persons, as may arise within the strict language of the law. There cannot be any implied concept either in identifying the subject of the tax or person liable to pay tax. That is why it is often said that subject is not to be taxed, unless the words of the statute unambiguously impose a tax on him, that one has to look merely at the words clearly stated and that there is no room for any intendment nor presumption as to tax. It is only the letter of the law and not the spirit of the law to guide the interpreter to decide the liability to tax ignoring any amount of hardship and eschewing equity in taxation. Thus, we may emphatically reiterate that if in the event of ambiguity in a taxation liability statute, the benefit should go to the subject/assessee. But, in a situation where the tax exemption has to be interpreted, the benefit of doubt should go in favour of the revenue, the aforesaid conclusions are expounded only as a prelude to better understand jurisprudential basis for our conclusion.

36. A harmonious reading of the above relevant extracts of the Dilip Kumar judgment enables us to note the following most important points:

♦ The well-settled principle is that when the words in a statute are clear, plain and unambiguous and only one meaning can be inferred, the Courts are bound to give effect to the said meaning irrespective of consequences

♦ that regard must be had to the clear meaning of the words and that the matter should be governed wholly by the language of the notification. Equity has no place in interpretation of a tax statute. Strictly one has to look to the language used; there is no room for searching intendment nor drawing any presumption.

♦ In the event of ambiguity in an exemption notification, should the benefit of such ambiguity go to the subject/assessee or should such ambiguity should be construed in favour of the revenue, denying the benefit of exemption to the subject/assessee?

♦ Be that as it is, in our country, at least from 1955, there appears to be a consistent view that if the words in a taxing statute (not exemption clause) are ambiguous and open to two interpretations, the benefit of interpretation is given to the subject and it does not matter if the taxpayer escapes the tax net on account of Legislatures‟ failure to express itself clearly (See the passage extracted hereinabove from Kesoram Industries case (supra)).

♦ It is the law that any ambiguity in a taxing statute should enure to the benefit of the subject/assessee, but any ambiguity in the exemption clause of exemption notification must be conferred in favour of revenue – and such exemption should be allowed to be availed only to those subjects/assesses who demonstrate that a case for exemption squarely falls within the parameters enumerated in the notification and that the claimants satisfy all the conditions precedent for availing exemption.

♦ Further, in case of ambiguity in a charging provisions, the benefit must necessarily go in favour of subject/assessee, but the same is not true for an exemption notification wherein the benefit of ambiguity must be strictly interpreted in favour of the Revenue/State.

♦ Any ambiguity in a taxation provision, therefore, is interpreted in favour of the subject/assesse

♦ Thus, we may emphatically reiterate that if in the event of ambiguity in a taxation liability statute, the benefit should go to the subject/assessee. But, in a situation where the tax exemption has to be interpreted, the benefit of doubt should go in favour of the revenue, the aforesaid conclusions are expounded only as a prelude to better understand jurisprudential basis for our conclusion.

37. To summarize the final conclusion of the Hon‟ble Supreme Court in the Dilip Kumar case :

(a) in the event of ambiguity in a taxation liability statute, the benefit should go to the assessee.

(b) But, in a situation where the tax exemption has to be interpreted, the benefit of doubt should go in favour of the revenue.

38. This brings to the important question about the nature of the basic Notification No.50/2017 Cus dated 30.6.2017.The Notification No.50/2017 Cus dated 30.6.2017 is Exemption and Effective Notification for Basic and the Additional Customs Duty for specified goods falling under Chapter 1 to 98. This Notification, while it is an exemption Notification, is also the Effective Rates Notification wherein the taxation (the Effective Rate) in respect of BCD and IGST applicable for various goods falling under Chapter 1 to 98 is given. The Basic Customs Duty and IGST for all the goods are given in the Tariff. But the actual taxing rate depends on the Effective Rate Notification. In the Notification No.50/2017 Cus dated 30.6.2017, apart from specifying the Effective Rate, they have also specified the exemption granted to various goods. The Table given under this Notification has Column 3 wherein the Description of the goods is given. At Column 4, which is the charging (taxation) column, the Standard Rates of Customs Duty, that is, the Effective Rate of Duty is given. Column 6 of this Notification specifies the Conditions to be fulfilled to avail the Rate specified at Column 4.In the case of Peas [Pisum Sativum], it has been observed from our above discussions, the same has been placed at Sl No.20 with Column 4 specifying NIL rate of BCD, without any condition beings attached at column 6 till 7.11.2017. Vide amending Notification No.84/2017 Cus dated 8.11.2017, Sl No.20A was inserted and Column 4 was modified to specify 50% BCD still without any condition being specified at Column 6. Notification No.93/2017 Cus dated 23.12.2017 increased the scope of exception provided for items described at Column No.3. Subsequently the amending Notification No.29/2018 Cus dated 1.3.2018 was brought in expanding the scope of exception provided for items described at Column 3, wherein Pisum Sativum was specifically excluded which clarifies that it was also still available at Sl No.20 at column 3 earlier.

39. In the Notification No.50/2017 Cus dated 30.6.2017, it can be seen that in respect of several goods, Conditions have been specified at Col.6. Such conditions are listed under the Annexure attached to this Notification. In case of these goods, the importer is required to fulfil the condition given therein, in order to avail the concessional rate of BCD / IGST. These conditions may be like ^„Undertaking to be given before the Dy Commissioner‟ or „ Certificate to be produced‟. In the past, the fulfilment or otherwise of these conditions were a matter of litigation. The Tribunals and Courts had gone to the extent of classifying the Conditions under two categories : (a) Procedural (Directory) and (b) Mandatory (Statutory). The Courts have been taken a lenient view if the condition was Procedural in nature. If the Condition was Mandatory, the Courts viewed that the Condition has to be fulfilled invariably. These issues were before the Hon‟ble Supreme Court in the Dilip Kumar case. The Apex Court has given a rest to such interpretations and has held that the conditions cannot be categorized as ^„Procedural‟ or as ^„Mandatory‟ to interpret the eligibility of exemption. The Supreme Court has held that if the importer / assessee wants to avail the exemption, he is required to fulfillall the conditions irrespective of whether they are ^„Procedural‟ or ^„Mandatory‟ in nature. Therefore, the earlier prevailing ambiguity has been finally put to rest in the Dilip Kumar case. The Supreme Court held that in case of Taxing issues, where there is difference in interpretation on the rate of Tax to be levied, the benefit of ambiguity / doubt has to be given to the assesse and in the case of such difference in respect of any eligibility of Exemption, the benefit of such ambiguity / doubt has to be given to the Revenue.

40. Now coming to the present case, as per the Taxing element of the Notification, importers are required to pay the BCD as per the Effective Rates specified. It is observed that so far as Pisum Sativum is concerned the Effective Rate which is ambiguous as to whether the BCD is to be paid @ 50% or @ NIL during the period 23.12.2017 to 28.2.2018. In order to claim the NIL rate as the correct rate and to pay the BCD, no conditions are specified. In other words, we have to see as to whether, the Dept had to power to insist to pay 50% BCD during the period in question when the Notification itself has placed the Pisum Sativum both under Sl No.20 as well as under Sl No.20A and specifying two different Effective Rates. Therefore, this is rather a case of ambiguity in the Taxation liability and not a case of ambiguity on account of exemption granted. The Revenue cannot deny that during this period, any importer could have insisted on getting the NIL rate of BCD benefit by citing the co-existence of Sl No.20 and Sl No.20A for the brief period. As noted by us in the earlier paragraphs, the very fact that the Sl No.20 was further modified on 1.3.2018 to include Pisum Sativum in the exclusion list, it would clarify that this product was very much part of both Sl No.20 and Sl No.20A.

41. It is also not the case of the Revenue that any Condition has been specified if NIL rate is to be applied and in the event of non-fulfillment of such condition, the BCD will be levied @ 50%.Therefore, we conclude that during the period in question the Notification itself specifies two Effective Rates of 50% and NIL rate. This has resulted in ambiguity about as to whether the Taxing provision in this case is NIL or 50% BCD. As a matter of fact,the importers are not availing any exemption, but taking recourse to lesser Tax liability as per the Effective Rates specified in the Notification, which is beneficial to them, for which they are eligible to do so as held in the case laws discussed supra. The case law of Dilip Kumar, in fact helps the importer rather than the Revenue.

42. Hence, we do not agree with the arguments of the Revenue that the case law of Dilip Kumar would be of any help to them so as to overcome the dual rates of BCD specified during the period in question. The Notification No.50/2017 Cus dated 30.6.2017, being an Effective Rates Notification in respect of the goods in question, Pisum Sativum, rather helps the importer’s case.

43. To summarize our conclusions :

a. The Revenue’s stand that the appellants have not filed any appeal against the self-assessed Bills of Entry is rejected. The re­assessment requests made in terms of Section 149 has to be considered as their Appeal before the concerned authorities.

b. Revenue’s stand that the goods in question Peas [Pisum Sativum] was liable to be taxed only under Sl No.20A of the Master Notification No.50/2017 Cus dated 30.6.2017 is rejected. It is held that the goods were specified both under Sl No.20 as well as under Sl No.20A during the period in question.

c. The importer is allowed to choose the more beneficial provision and cannot be forced to opt for / follow the non-beneficial provision.

d. Since Notification No.50/2017 Cus dated 30.6.2017 specifies the taxability per se (Effective Rate) for Pisum Sativum at Sl No.20 and Sl. No.20A and there are no conditions attached to seek assessment under of NIL rated BCD, the case law of Dilip Kumar relied upon by the Revenue, cannot be applied in case of these importers.

e. Therefore, the two appellants are eligible to claim the refund.

f. The Commissioner (Appeals) while sanctioning the refunds in case of 5 importers (Respondents herein), has followed the applicable case law during that time. Even otherwise, as held supra, the Apex Court‟s decision of ITC is not applicable to the present case.

44. Accordingly, we allow the Appeals filed by the importers and dismiss the Appeals filed by the Revenue. Consequential relief, if any, as per law is granted to the appellants/respondents.

(Order was pronounced in the open Court on 12/10/2023)