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2023 (9) TMI 1147 - HC - CustomsRefund of IGST - exemption from certain capital goods from the whole of the duty of customs leviable under the Customs Tariff Act - HELD THAT - It is borne on reading the decision in the case of Prince Spintex 2020 (2) TMI 1168 - GUJARAT HIGH COURT , that an identical issue as the one raised in these petitions was decided by this Court considering the policy and the relevant notifications, where it was held that It is held that the amendment of Notification No. 16/2015-Cus vide Serial No.1 of Notification No. 79/2017 dated 13th October, 2017, would also apply to imports made during the period 1.7.2017 to 13.10.2017. Trade Notice 11/2018 dated 30.6.2017 to the extent it is stated therein that under Chapter 5 importers would need to pay IGST is hereby quashed and set aside. All the petition allowed.
Issues Involved:
1. Quashing of Notification No. 26/2017-Customs and Trade Notice 11/2018. 2. Refund of IGST paid by the petitioners under the EPCG Scheme. 3. Validity of the levy of IGST on imports under the EPCG Scheme during the transition to the GST regime. Summary of Judgment: Issue 1: Quashing of Notification No. 26/2017-Customs and Trade Notice 11/2018 The petitioners requested to quash Notification No. 26/2017-Customs dated 29.06.2017 and Trade Notice 11/2018 dated 30.06.2017, which required importers to pay IGST. The petitioners argued that these notifications were contrary to the Foreign Trade Policy 2015-2020, which allowed for the import of capital goods at zero customs duty under the EPCG Scheme. Issue 2: Refund of IGST paid by the petitioners under the EPCG SchemeThe petitioners sought a refund of the IGST paid, amounting to Rs. 4,95,90,643/-, on the grounds that the levy was illegal and contrary to the policy. The Court referenced a previous decision in the case of M/s. Prince Spintex Pvt Ltd vs. Union of India, where it was held that the levy of IGST on imports under the EPCG Scheme during the period from 01.07.2017 to 13.10.2017 was not in consonance with the Foreign Trade Policy 2015-2020. Issue 3: Validity of the levy of IGST on imports under the EPCG Scheme during the transition to the GST regimeIt was argued that the imposition of IGST on imports under the EPCG Scheme was due to an oversight when amending Notification No. 16/2015-Cus. The Court found that the intention of the Central Government was always to exempt such imports from additional duties, including IGST. The Court held that Notification No. 79/2017 dated 13.10.2017, which exempted IGST on such imports, should be considered clarificatory and applicable retrospectively from 01.07.2017. Final Directions:The Court quashed Trade Notice 11/2018 and the impugned order-in-original dated 29.09.2018. It held that the petitioners are entitled to a refund of the IGST paid during the period from 01.07.2017 to 13.10.2017, with interest at the statutory rate. The petitions were allowed, and the rule was made absolute in each petition.
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