LexM/S SURAJ IMPEX (INDIA) PVT. LTD. versus UNION OF INDIA & ORS.
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[2025] 5 S.C.R. 974 : 2025 INSC 755 M/s Suraj Impex (India) Pvt. Ltd. v. Union of India & Ors. (Civil Appeal No(s). 7089-7090 of 2025) 22 May 2025 [B.V. Nagarathna and Satish Chandra Sharma,* JJ.] Issue for Consideration Whether the Circular No. 35/2010-Cus. Dt. 17.09.2010 for the purposes of claim of custom duty drawbacks for merchant exporters, have retrospective or prospective effect. Headnotes† 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 * Author [2025] 5 S.C.R. 975 M/s Suraj Impex (India) Pvt. Ltd. v. Union of India & Ors. 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] Case Law Cited Commissioner of Central Excise, Bangalore v. Mysore Electricals Industries Ltd. [2006] Supp. 9 SCR 19 : [2006] 12 SCC 448; Shyam Sunder v. Ram Kumar [2001] Supp. 1 SCR 115 : [2001] 8 SCC 24; Sree Sankaracharya University of Sanskrit & Ors. v. Dr. Manu & Anr [2023] 7 SCR 366 : [2023] SCC Online SC 640; State of Bihar v. Ramesh Prasad Verma [2017] 2 SCR 342 : [2017] 5 SCC 665; CIT v. Gold Coin Health Food (P) Ltd. [2008] 12 SCR 179 : [2008] 9 SCC 622; CIT v. Vatika Township (P) Ltd. [2014] 12 SCR 1037 : [2015] 1 SCC 1; Vijay v. State of Maharashtra [2006] Supp. 4 SCR 81 : [2006] 6 SCC 289 – referred to. Books and Periodicals Cited Justice G.P. Singh, “Principles of Statutory Interpretation” (15th Edition LexisNexis 2021) – referred to. 976 [2025] 5 S.C.R. Supreme Court Rep
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