This unusual subject of corrigendum now is my subject of discussion in this column because of a corrigendum which has been issued by the Ministry of Finance regarding the rate of duty of newsprint of certain specifications. The corrigendum has been issued from the Ministry of Finance, Department of Revenue file No.341/145/2008-TRU on November 6, 2008. It says, “for 2 per cent , read 3 per cent ” in the notification No.110/2008-Customs dated October 22, 2008. This Customs notification uses the heading CORRIGENDUM and does not have any independent number and also does not appear in the ministry’s website.
The net effect of the notification is that the earlier notification No.110/2008 gets cancelled since the previous rate of duty was also 3 per cent . Notification No.110/2008 had reduced the rate from 3 per cent to 2 per cent. Now the rate goes back to 3 per cent . So the questions that arise are two: (i) Can a corrigendum at all change a rate of duty? Legally is it permissible to make a change in the rate of duty by a corrigendum? (ii) What will be rate of duty ( 2 per cent or 3 per cent ) in the intervening period that is from October 22, to November 5, i.e. 16 days? And thereafter also. It will be 3 per cent if the corrigendum has a retrospective effect.
Coming to the first point about the legality of a corrigendum in changing the rate of duty we find that the Customs Act does not authorise to do so. The only provision is in the Section 154 of the Customs Act which permits clerical or arithmetical mistake or accidental slip in any decision or order passed by the officers. Although writing 2 per cent in the place of 3 per cent can as well be an accidental slip, a notification is neither an order nor a decision. Therefore changing the notification cannot be done by a corrigendum. It can only be done by an amendment. In the excise act, there is no Section for corrigendum. There is a Section 38A for amendment of Rules, Orders and Notifications also. However, this is about an amendment not a corrigendum. Section 38A(c) specifically lays down that such amendment “shall not affect any right, privilege, obligation, liability, acquired, accrued or incurred under any rule, notification or order so amended…..” unless a different intention appears (italics mine). That is to say, if the notification specifically mentions that there will be a retrospective effect, then only it will have such an effect. National Steel Industries Ltd. Vs. Commissioner of C. Excise, Indore -2000 (126) E.L.T. 709 (Tribunal) lays down that a Modvat credit which has accrued is a vested right and such a pre-existing right cannot be destroyed by an amendment unless it is expressly retrospective. This is about amendment. In the case of Gupta Radio & Watch Co. v. CC, Jaipur – MANU/CE/0199/1986 the Tribunal has held that an adjudication order if it is changed by corrigendum becomes a changed order and it cannot be done by corrigendum. That is illegal.
Coming to the second point of retrospectivity, if a corrigendum amends something substantial then it becomes an amendment. There are several judgements to this effect. (i) In re: Gupta Dying and Printing Mills (GOI) 2001(137)E.L.T. 977(G.O.I.) – that “replacing a set of word(s) or numeral(s) by another set of word(s) or/and numeral(s) which alter the text in a substantive manner may not be strictly called a correction, rather these assume the form of an amendment”. (ii) In the case of CC, Hyderabad vs. ITW Signod India Ltd. – 2008(221)ELT75(T), the Tribunal has held that in a show cause memo if the classification is changed by a corrigendum, then it becomes a fresh show cause memo. The idea is that if a corrigendum brings about a substantial change then it does not remain a corrigendum but becomes an amendment.
The conclusion is that a substantial change cannot be brought about by a corrigendum. If it does bring about such a change, it becomes an amendment. In the Customs Act there is a provision for corrigendum, but it does not provide for substantial change or change in rate of duty in a notification. So, between October 22, 2008 to November 5, 2008, the rate of duty must be 2 per cent. And from November 6, 2008 the rate of duty will continue to be 2 per cent because corrigendum cannot change the rate of duty as per Customs Act. If the Ministry of Finance wants to correct the situation it should immediately issue an amendment with prospective effect from now onwards. And for the past period till October 22, 2008 it will remain 2 per cent.