Custom Tariff Act, 1975 – Chapter 23 – Central Excise Rules, 2002 – Circular No. 35/2010-Cus. Dt. 17.09.2010 – The High Court held that the subject Circular was to be made effective from 20.09.2010, it was prospective in nature:
Held: Having regard to the Circular dt. 17.09.2010 vis-à-vis the previous Notifications, no new right or benefit came to be created, but the actual scope of the benefit accruing to the appellant and such similarly placed merchant exporters, was explained and settled once and for all – By virtue of the said Circular, it was merely clarified that the benefit of 1% customs duty drawback as indicated under the prior Notification was available to SBM merchants despite having availed CENVAT – Being explanatory in nature, the Circular in question cannot be construed as an adoption of a fresh fiscal regime for rebate of customs duty, intended to affect vested rights or impose new burdens upon the Department – It was passed to resolve the ambiguity qua the meaning & threshold of the previous Notifications – For the same reason, the operation of such a provision or instruction by the Department could only be retrospective in nature, so as to give effect to the objective of the Notifications issued by CBEC – In the instant case, the High Court adopted a cursory view by solely relying on the submission of the Respondents that because the subject Circular was to be made effective from 20.09.2010, it was prospective in nature – The High Court did not appreciate the rationale of the CBEC Circular nor the purport of the Notifications time and again issued by the Department and passed the Impugned Order dt. 17.11.2014 in undue haste – Subsequently, as well it refused to remedy the error apparent on record, by dismissing the Review Petition at its threshold – Thus, the impugned judgment and order of the High Court is set aside – The appellant is entitled to the benefit of 1% AIR Customs Duty Drawback on its export of SBM from the year 2008 as applicable, by according retrospective operation to the Circular No. 35/2010- Cus. dated 17.09.2010 issued by the Central Board of Excise & Customs, New Delhi, for the purposes of All Industry Rate (AIR) Duty Drawbacks. [Paras 15, 19, 20] Interpretation of Statutes – Doctrine of fairness – Purposive construction – Retrospectivity of a statute – Clarificatory/declaratory provision:
Held: The retrospectivity of a statute is to be tested on the anvil of the doctrine of “fairness” – The substratum of a beneficial legislation is to ensure that the benefit is uniform and absolute, which may be prospective in nature, but when such benefit to one person does not inflict any undue burden on the other, the purposive construction can be considered to be given a retrospective effect – It is therefore pertinent to clarify that except in cases where such enactments or issuance of Circulars are arbitrary, vexatious or constitute a parallel mechanism making its operation unfair, the Courts need not entertain objections to the operation of a clarificatory/declaratory provision which is only intended to assert & give effect to its parent provision/statute. [Para 18]
As published in the Supreme Court Reports, Supreme Court of India. Headnotes prepared by: Ankit Gyan. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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