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TMI Blog2018 (11) TMI 104X X X X Extracts X X X X X X X X Extracts X X X X ..... ation No 79/2017-Customs dated 13th October, 2017 is inter alia arbitrary, unconstitutional and violative of Article 14 of the Constitution of India and quash the same. WP(MD)No.18436 of 2018 Prayer : To issue a Writ of declaration or any other appropriate directions declaring that paragraph 1 of of Notification No 33/2015-20 dated 13th October, 2017 is inter alia arbitrary, unconstitutional and violative of Article 14 of the Constitution of India and quash the same. WP(MD)No.18437 of 2018 Prayer : To issue a Writ of Certiorari or any other order or any other appropriate Writ, Order or direction in the nature of Writ of Certiorari calling for the Notice bearing DRI/KZU/CF/ (INT-09)/2017/1499 dated 15 March 2018 issued by the 3rd Respond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conditions in respect of the exemption and remission schemes under Chapter 4 of FTP. 4.Prior to the introduction of GST on 01.07.2017, duty free exemption under AA issued, was available to most/all the duties leviable at the point of import and the same was governed by Notification No 18/2015-Customs dated 01.04.2015. With the advent of the GST regime, the exemption to IGST/ Compensation cess portion of import duties leviable respectively under Sec 3 (7) and 3(9) of the Customs Tarrif Act got withdrawn to the AA holders. This change was given effect by Notification No 26/2017 - Cus dated 29.06.2017 that amended the parent notification No.18/2015-Cus. For administrative exigencies, the relief in respect of these portion of taxes are extende ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the IGST portion of import duties and taxes, however, was subject to two conditions viz. i. The export obligation shall be fulfilled by physical exports only. ii. That the exemption from IGST is subject to pre import condition. 6.In effect, the exemption to IGST and compensation cess on imported goods under AAs was completely unavailable with the advent of GST regime and the same temporarily restored for the period from 01.10.2017 to 30.09.2018 through an array of notifications issued under DGFT and Customs with conditions and with sun set clauses. The intentions of the government is therefore clear and there is no ambiguity that the blanket allowing of IGST exemption on imports against AAs is not desirable in the new GST regime and h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lect the actual quantity of inputs gone into the manufacture of exported goods on a case by case basis. 8.Under the FTP 2015-20, DFIA scheme under Chapter 4 alone will suit the existing operation of the petitioner in the GST regime. And under DFIA, there is no exemption of IGST and compensation cess at the time of imports. A careful reading of the Foreign Trade policy indicates that the actual user condition or physical export is imposed with an intention not to allow diversion of imported raw materials to the local market apparently on the prudence that allowing the same is fraught with revenue risks. Post export AA can act as a conduit for substituting local raw materials into manufacturing export goods and for diverting the imported inp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing relief in view of Para 4.02 of the FTP that AAs are issued in accordance with the policies and procedures in force as on the date of the issue of Advance Authorization. 11.Even by not allowing exemption of IGST at the time of import, no benefit in the AA scheme is altered by the Government, though collateral costs get fastened on the petitioner and the likes by way of blockages in cash flow and attendant interest liabilities. And clearly, it is a matter of public policy. And rightly, the choice of policy is for the decision maker, in this case the Government, to make and not for the Court. Nor has been established before this court that the decision suffers from perversity, irrationality or arbitrariness. 12.In view of the above factu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hrough the machinations under the relevant Customs Acts and therefore the contentions of primacy of one act over the other is not tenable. The N.S.Ratnam Case is not relevant as the treatment of post exports and pre exports is discernible and intelligible. More so, under the AA Scheme for post exports in the GST regime, the exemption is deferred to the point of export. For the discussions regarding revenue risks and the difficulty in arriving at the real time exemption allowance for issue of AAs under the post export scheme, the Roopchand Adlakha case and P.R.Sriramulu case law is totally distinguishable. The principles of Lex Non Cogitadimpossibilia does not apply in this case as the scheme is an option and not a compulsion. Therefore, Raj ..... X X X X Extracts X X X X X X X X Extracts X X X X
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