TaxTMI 
TaxTMI 
2023 (9) TMI 1147
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.... reproduced the prayers, which read as under: "(a) That this Honourable Court be pleased to quash and set aside Notification No. 26/2017-Custom, dated 29.06.2017 annexed as 'Annexure-F' to the extent amending Notification No. 16/2015-Customs, dated 01.04.2015, annexed as 'Annexure- B'; and (b) That this Honourable Court be pleased to quash and set aside Trade Notice 11/2018, dated 30.06.2017 issued by the respondent No. 2, annexed as 'Annexure-G', to the extent it is stated therein under Chapter 5 that importers would need to pay IGST; and (c) That this Honourable Court be pleased to issue writ of mandamus or any other appropriate writ, direction or order directing the Respondents to sanction, grant and pay the refund of Rs. 4,95,90,643/- and interest thereon at the appropriate rate after first directing reversal of the entries of utilization of the subject credit and debiting the said amount from credit ledger consequently available with the petitioner or in such other manner as deemed appropriate in the facts and circumstances of the case; and (d) Ex parte ad-interim relief in term of Prayer 9(c) be granted; and (e) For Costs; and ....
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....ted from payment of IGST, came into force only on 13.10.2017, but the petitioner had filed the bill of entry on 3.8.2017. As there was no notification exempting import of such goods from payment of IGST, it has been held that IGST was chargeable on the capital goods imported by the petitioner under the EPCG Scheme. 7. For the purpose of examining the validity of the petitioner's claim for exemption from payment of IGST in respect of capital goods imported by it on the strength of the authorisation held by it under the EPCG Scheme prior to the issuance of Notification No. 79/2017-Cus exempting import of such goods from payment of IGST, it may be necessary to refer to the relevant provisions of the Foreign Trade Policy and the notifications issued in this regard from time to time. 8. In the exercise of powers under section 5 of the Foreign Trade (Development and Regulation) Act, 1992, the Central Government has notified the Foreign Trade Policy 2015-20 vide Notification No. 1/2015-20 which came into effect from 1st April 2015. Chapter 5 of the Foreign Trade Policy bears the heading "Export Promotion Capital Goods (EPCG) Scheme". Paragraph 5.00 thereof, provides the ....
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....oms duty under the EPCG Scheme is not an exemption simpliciter, but is an exemption with a corresponding obligation on the authorisation holder to export goods equivalent to six times the duty saved on import of such capital goods. 11. To give effect to the above policy of permitting import of capital goods at zero customs duty, the Central Government, in exercise of powers under section 25 of the Customs Act, issued Notification 16/2015-Cus dated 1st April 2015 exempting the goods specified in the table annexed thereto from: (i) The whole of the duty of customs leviable thereon under the First Schedule to the Customs Tariff Act, 1975, and (ii) The whole of the additional duty leviable thereon under section 3 of the said Customs Tariff Act, when specifically claimed by the importer. 12. The exemption under the said notification is available subject to the conditions stipulated thereunder. Condition (i) thereof provides that the goods imported should be covered by a valid authorisation issued under the Export Promotion Capital Goods Scheme in terms of Chapter 5 of the Foreign Trade Policy permitting import of goods at zero customs duty. 1....
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....s, not exceeding forty per cent, as may be notified by the Government on the recommendations of the Council and collected in such manner as may be prescribed and shall be paid by the taxable person: Provided that the integrated tax on goods imported into India shall be levied and collected in accordance with the provisions of Section 3 of the Customs Tariff Act, 1975 (51 of 1975) on the value as determined under the said Act at the point when duties of customs are levied on the said goods under Section 12 of the Customs Act, 1962 (52 of 1962). 17. Section 3 of the Customs Tariff Act came to be amended with effect from 1.7.2017 and integrated tax became payable under sub-section (7) of section 3 of the said Act and compensation cess came to be payable under sub-section (9) of section 3 of the said Act. 18. Sub-section (7) and sub-section (9) of section 3 of the Customs Tariff Act, read thus: "(7) Any article which is imported into India shall, in addition, be liable to integrated tax at such rate, not exceeding forty per cent, as is leviable under section 5 of the Integrated Goods and Services Tax Act, 2017 on a like article on its supply in India....
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....refore paid the IGST. 23. Subsequently, vide Notification No. 33/2015- 2020, dated 13th October, 2017, issued in exercise of powers conferred by section 5 of Foreign Trade (Development and Regulation) Act, 1992, read with paragraph 1.02 of the Foreign Trade Policy, 2015- 20, as amended from time to time, the Central Government made amendments in the Foreign Trade Policy 2015-2020. Para 2 of the said notification, to the extent the same is relevant for the present purpose, reads thus: "2. Para 5.01 (a) is amended to read as under: "5.01 (a) EPCG Scheme allows import of capital goods for pre-production, production and postproduction at Zero customs duty. Capital goods imported under EPCG scheme for physical exports are also exempt from whole of the Integrated Tax and Compensation Cess leviable thereon under the sub-section (7) and subsection (9) respectively, of section 3 of the Customs Act, 1975 (51 of 1975) as may be provided in the notification issued under Department of Revenue. Alternatively, the Authorisation holder may also procure Capital Goods from indigenous sources in accordance with provisions of paragraph 5.07 of FTP. 24. In terms of t....
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.... Government is, therefore, clear that total exemption from payment of additional duty was to be granted under the EPCG Scheme. This was also the promise held out to the petitioner and similarly situated persons when they were granted the authorisation under the EPCG Scheme. At the time when the authorisation was granted, by virtue of Notification No. 16/2015-Cus dated 1st April, 2015, there was total exemption from payment of additional duty under section 3 of the Customs Tariff Act. However, subsequently, upon the coming into force of the GST regime, while section 3 of the Customs Tariff Act came to be amended by inserting subsections (7) and (9) therein imposing additional customs duty in the nature of integrated tax and goods and services compensation cess respectively, and though Notification No. 16/2015-Cus dated 1st April, 2015 came to amended by substituting the words and figure "section 3 of the Customs Tariff Act" with the words and figures and brackets "subsections (1), (3) and (5) of section 3 of the Customs Tariff Act" , the words, figures and brackets "sub-sections (7) and (9) of section 3 of the Tariff Act", were not included. 28. The question that arises for....
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....rtence or oversight that while amending notification No. 16/2015-Cus dated 1st April, 2015 by Notification No. 26/2017-Cus, the words, figures and brackets "sub-section (7) and sub-section (9)" were not inserted and that it was always the intention of the Central Government to exempt imports of capital goods under the EPCG Scheme from payment of additional duty under section 3 of the Customs Tariff Act. Notification No. 79/2017 dated 13th October, 2017, therefore, has to be read as clarificatory or curative in nature, inasmuch as, otherwise it would leave as whole class of importers who had imported capital goods, uncovered during the period 1.7.2017 to 13.10.2017, allowing the department to levy additional duty under sub-sections (7) and (9) of the Customs Tariff Act on such imports, despite the fact that the Foreign Trade Policy 2015-2020 envisages imports under the EPCG Scheme at zero customs duty. Under the circumstances, the action of the respondents in levying integrated tax and compensation cess on the import of capital goods by the petitioner under a valid authorisation under the EPCG Scheme, not being in consonance with the Foreign Trade Policy 2015-2020 cannot be sustaine....