Retrospective Bungling by TRU – Even Parliament Not Spared
THIS is the height of bungling by the Board – they got Parliament to amend a non existing provision in the statute. A lawyer friend was very angry with us for not covering this when we point out mistakes in Board manufactured notifications leaving aside a parliament enacted blunder.
Let's get into the issue:
Clause 70 (b) of the Finance Bill, 2011 [and Section 73 (b) of the Finance Act 2011] reads as:
In the Central Excise Tariff Act, 1985 (hereinafter referred to as the Central Excise Tariff Act),— (b) the Third Schedule shall be amended in the manner specified in the Twelfth Schedule.
The Twelfth Schedule reads as:
In the Third Schedule to the Central Excise Tariff Act,
(a) for S. No. 100 and the entries relating thereto, the following shall be substituted and shall be deemed to have been substituted with effect from the 27 th day of February, 2010, namely: -
S.No. | Chapter Heading, Sub-heading or tariff item | Description of goods |
|---|---|---|
(1) | (2) | (3) |
"100 | Any Chapter | Parts, components and assemblies of vehicles (including chassis fitted with engines) falling under Chapter 87 excluding vehicles falling under headings 8712,8713,8715 and 8716"; |
(b) after S. No. 100 and the entries relating thereto, the following S.No. and entries shall be added and shall be deemed to have been added with effect from the 29th day of April, 2010, namely: -
"100A | Any Chapter | Parts, components and assemblies of goods falling under tariff item 8426 41 00, headings 8427, 8429 and sub-heading 8430 10". |
The explanatory memorandum to the Finance Bill 2011 states, “AMENDMENTS IN THE SCHEDULES TO CENTRAL EXCISE TARIFF ACT, 1985 – (10) The Third Schedule is being amended retrospectively to include certain specified goods, which were notified under section 4A ”.
The divine DO letter from the JS TRU on the budget in para 6.11, states, “ Parts, components and assemblies of vehicles falling under chapter 87 excluding vehicles of headings 8712, 8713, 8715 and 8716 were notified under section 4A of the Central Excise Act with effect from 27.02.2010. Subsequently, parts, components and assemblies of certain vehicles falling under chapter 84 were also notified under these provisions with effect from 29.04.2010. However, these goods were not simultaneously included in the Third Schedule to the CETA. These are now being included in the Third Schedule retrospectively w.e.f. 27.02.2010 and 29.04.2010 respectively .”
What is the Problem? Are you still wondering as what the problem is? The problem is simple – there is no third schedule to the Central Excise Tariff Act which they amended by the Finance Act. Yes Parliament has amended a non-existing schedule to the Central Excise Tariff Act!!!!!
What they wanted to amend was the third schedule to the Central Excise Act and they ended up amending the wrong Act!
They forgot to do this in 2010, and so they did it retrospectively in 2011, and bungled again. Now they will have to wait till next budget to make yet another retrospective amendment and till then the cases booked will continue – all because they did not know which Act to amend!
This is not a casual mistake – the mistake figures twice in the Finance Act and is also mentioned in the memorandum and the TRU letter. Now the Board cannot get away with a retrospective corrigendum – after all this is an Act passed by Parliament and signed by the President of India and certainly an Under Secretary in the Board cannot issue a corrigendum to a document signed by the President of India!.
How did this happen? Board must be having a printed tariff in which the third schedule is given and they must have assumed it to be the third schedule to the Tariff Act! And sheer callousness and disrespect to everyone else including Parliament of India. What would have been the image of the poor Finance Minister if somebody in Parliament had asked him to show the third schedule to Central Excise Tariff Act? All the wise men in the Board could not have helped him in tracing the non-existing schedule!