THIRD MEMBER ON REFERENCE : SHRI JEET RAM KAIT, MEMBER (T) COLGATE PALMOLIVE (INDIA) LTD. Vs. COMMISSIONER OF CUSTOMS, PATNA

JUDGEMENT

(1.) THE issue in the instant appeal relates to the refund claim filed by the appellants, vide their letter dated 15 -1 -2001 for refund of Special Additional Duty paid in respect of the imports made from Nepal during the period from 13 -3 -2000 to 29 -9 -2000. The Special Additional Duty was paid by the appellants under protest and accordingly, the assessments were provisional. The said refund claim has been rejected by the authorities below on the ground that during the relevant period, Special Additional Duty was leviable on the imports and the same was exempted by issuance of the Notification No. 124/2000 -Cus., dated 29 -9 -2000. The appellants are not disputing the factual position that Special Additional Duty on all Nepalese Imports into India, was exempted with effect from 29 -9 -2000 when Notification No. 124/2000 was issued. But they submit that the said Notification should be treated as clarificatory and hence having retrospective effect, inasmuch as under the Treaty of Trade and Agreement of Co -operation to control unauthorised trade between His Majestys Government of Nepal and the Government of India, only Additional Excise Duty was leviable on goods imported from Nepal into India.

(2.) AS per facts on record, the appellants were importing Tooth Paste products from Nepal through Land Customs Station, Raxaul and were clearing the same after paying Special Additional Duty of Customs @ 4% under protest with effect from 1 -3 -2000. The goods in question were exempted from Basic Customs Duty vide Notification No. 37/96 -Cus., dated 23 -7 -96 and during the relevant period, there was no specific exemption from payment of Special Additional Duty (SAD in short). The exemption from SAD was granted only on issuance of Notification No. 124/2000, dated 29 -9 -2000 by way of amendment to Notification No. 37/96 -Cus., dated 23 -7 -96. For better appreciation, Notification No. 124/2000 is reproduced below : -

(3.) THE appellants contention is that the above Notification No. 124/2000 which amends the earlier Notification No. 37/96 and enlarges the scope of exemption from Basic Customs Duty to Special Additional Duty, should be considered as retrospective. For their above contention, they refer to the terms of the provisions of the Treaty of Trade between the Government of India and His Majestys Government of Nepal, which is to the effect that all the goods manufactured in Nepal and imported into India, would be exempted from the Customs Duty and such goods would be liable only to Additional Duty of Customs equal to the Excise Duty for the time being leviable on similar products manufactured in India. As such, they contend that in terms of the provisions of the said Treaty, no SAD was leviable and the subsequent Notification issued on 29 -9 -2000 would be clarificatory notification and hence retrospective. It is their contention that the said Treaty of Trade governing imports of Nepal to India, provided for levy of countervailing duty only and as such, the levy and collection of SAD under Section 3A of the Customs Tariff Act, 1975 was, ab initio, void and contrary to the provisions of Treaty and Trade between the two countries. Notification No. 124/2000 only reiterated the correct legal position and the refund of duty paid by the appellants under protest prior to coming into force of the said Notification, is liable to be granted to them.