9911796707
TMI Blog2020 (2) TMI 1168X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 2,38,82,204/- (sic. Rs. 2,38,83,203/-) with interest at the rate of 24% thereon. 2. The first petitioner (hereinafter referred to as "the petitioner") is engaged in the business of manufacturing of cotton yarn by way of spinning process. The finished goods are being supplied by the petitioner within India and are also exported outside India. In exercise of powers conferred under section 5 of the Foreign Trade (Development and Regulation) Act, 1992, the Central Government has notified Foreign Trade Policy 2015-20 vide notification No.1/2015-20 which came into effect from 1.4.2015. The Export Promotion Capital Goods (EPCG) Scheme is covered under Chapter 5 of the Foreign Trade Policy. Under paragraph 5.01 of the EPCG Scheme, import of capital goods for pre-production, production and post production is allowed at zero customs duty subject to specified conditions. 2.1 In pursuance to Chapter 5 of the Foreign Trade Policy, 2015-20, Notification No.16/2015-Customs dated 1st April, 2015 came to be issued under section 25(1) of the Customs Act, 1962 whereby the Central Government has exempted capital goods from the whole of the duty of customs leviable thereon under the First Sched ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te supply of goods and/or services, Integrated Goods and Services Tax (hereinafter referred to as "IGST") is payable under the Integrated Goods and Services Tax Act, 2017 (hereinafter referred to as "the IGST Act"). 2.5 In terms of section 7(2) of the IGST Act, import of goods is deemed to be inter-State supply of goods. Under sub-section (1) of section 5 the IGST Act, IGST is payable on import of goods into India. Accordingly, section 3 of the Customs Tariff Act was also amended with effect from 1.7.2017 and IGST became payable under sub-section (7) of section 3 of the Customs Tariff Act on import of goods into India. Simultaneously, Notification No.16/2015-Cus dated 1.4.2015 also came to be amended with effect from 1.7.2017 by Notification No.26/2017-Cus dated 29.6.2017, whereby in the opening paragraph in clause (ii) for the words and figures "under section 3", the words, figures and brackets "under subsections (1), (3) and (5) of section 3" came to be substituted. The second respondent - DGFT issued a Trade Notice bearing No.11/2018 dated 30.6.2017 wherein it was stated that the importers would need to pay IGST and take input tax credit as applicable under the GST rules. Due ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds cleared for home consumption. 2.10 Subsequently, vide Notification No.33/2015-20 dated 13.10.2017, certain amendments were made in Chapter 5 of Foreign Trade Policy 2015-20, whereby capital goods imported under the EPCG Scheme for physical exports also came to be exempted from the whole of the integrated tax and compensation cess leviable thereon under sub-section (7) and sub-section (9) respectively of section 3 of the Customs Tariff Act. Pursuant to the amendment in the Foreign Trade Policy 2015-20, the original Notification No.16/2015-Cus came to be amended vide Notification No.79/2017-Cus dated 13.10.2017 making corresponding amendments. Thus, with effect from 13.10.2017 EPCG authorisation holders were allowed to claim exemption from the whole of IGST payable under sub-section (7) of section 3 of the Customs Tariff Act on the import of goods. Thus, the importers who cleared the capital goods during the period 1.7.2017 to 12.10.2017 were not granted exemption from additional duty of customs though they were holding valid EPCG authorisation. 2.11 The petitioner filed a refund application dated 28.4.2018 before the Assistant Commissioner (Customs), ICD, Ahmedabad on 8.6.201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5- Cus, the respondents had held out that the additional duty leviable thereon under section 3 of the Customs Tariff Act is exempted, therefore, the principle of promissory estoppel would apply and the respondents cannot levy additional duty of customs under sub-sections (7) and (9) of section 3 of the Customs Tariff Act on the import of capital goods under an authorisation under the EPCG Scheme for the period between 1.7.2017 to 13.10.2017. In support of his submission, the learned counsel placed reliance upon the decision of this court in Shree Renuka Sugars Ltd. v. Union of India, 2018 (360) ELT 483, wherein the court held thus:- "15. The crux of the issue is that the Government of India withdrew the exemption from payment of duty on export of sugar with the objective of controlling the domestic sugar prices. This had nothing to do with the exporters such as the petitioners. Raw sugar imported against advance authorization on the condition of reexport had no impact on domestic sugar price. Impounding export duty on such exports would not serve the purpose of controlling local sugar prices. Apparently since inadvertently the withdrawal of exemption also hit the exports of suga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he court held thus:- "7. Coming to the second question, namely the issuance of notification by the State Government in exercise of power under Section 7 of the Bihar Finance Act, it is true that issuance of such notifications entitles the industrial units to avail of the incentives and benefits declared by the State Government in its own industrial incentive policy. But in exercise of such power it would not be permissible for the State Government to deny any benefit which is otherwise available to an industrial unit under the Incentive Policy itself. The Industrial Incentive policy is issued by the State Government after such Policy is approved by the Cabinet itself. The issuance of the notification under Section 7 of the Bihar Finance Act is by the State Government in the Finance Department which notification is issued to carry out the objectives and the policy decisions taken in the Industrial Policy itself. In this view of the matter, any notification issued by the Government Order in exercise of power under Section 7 of the Bihar Finance Act, if is found to be repugnant to the Industrial Policy declared in a government resolution, then the said notification must be held to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Supreme Court in the case of W.P.I.L. Ltd. v. Commissioner of Central Excise, Meerut, UP, 2005 (181) ELT 359 (SC) ó (2005) 3 SCC 73, wherein the court held thus:- "14. In our opinion, therefore, the authorities were in error in upholding the demand and in directing the appellant to pay excise duty. 15. The learned counsel for the appellant is also right in relying upon a decision of this Court in Collector of Central Excise, Shillong v. Wood Craft Products Ltd., (1995) 3 SCC 454. In that case, this Court held that a clarificatory notification would take effect retrospectively. Such a notification merely clarifies the position and makes explicit what was implicit. Clarificatory notifications have been issued to end the dispute between the parties. 16. In view of the consistent policy of the Government of exempting parts of power driven pumps utilized by the factory within the factory premises, it could not be said that while issuing Notification No.46/94 of March 1, 1994, the exemption in respect of said item which was operative was either withdrawn or revoked. The action was taken only with a view to rescinding several notifications and by issuing a composite noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctory within the factory premises, it could not be said that while issuing Notification No.46/94 of March 1, 1994, the exemption in respect of said item which was operative was either withdrawn or revoked. The action was taken only with a view to rescinding several notifications and by issuing a composite notification. The policy remained as it was and in view of demand being made by the Department, a representation was made by the industries and on being satisfied, the Central Government issued a clarificatory Notification No.95/94 on April 25, 1994. It was not a new notification granting exemption for the first time in respect of parts of power driven pumps to be used in the factory for manufacture of pumps but clarified the position and made the position explicit which was implicit." 17. For the foregoing reasons, in our opinion, the appeals deserve to be allowed and are allowed accordingly. Deposit, if any, made by the appellant in pursuance of the order passed by the authorities below will be refunded to it. In the facts and circumstances of the case, however, there shall be no order as to costs." 10. As we find that the compounded rubber was also rescinded by the same N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same powers again in public interest. In our opinion, no justifiable prejudice was caused to the appellants in the absence of any unequivocal promise by the Government not to act and review its policy even if the necessity warranted and the "public interest" so demanded. Thus, in the facts and circumstances of these cases, the appellants cannot invoke the doctrine of promissory estoppel to question the withdrawal notification issued under Section 25 of the said Act." [Emphasis supplied] 37. The decision in Kasinka Trading (supra) has been distinguished in the later decision by this Court in State of Punjab v. Nestle India Ltd., 2004 (6) SCC 465, on the ground of the inherent nature of an exemption notification issued under Section 25 of the Customs Act. Even in respect of a notification under Section 25 of the Customs Act this Court has taken the view that the withdrawal even of such a notification must not be "arbitrary" or "unreasonable" (see Dai- Ichi Karkaria Ltd. v. Union of India, 2000 (4) SCC 57). 38. The principle underlying legitimate expectation which is based on Article 14 and the rule of fairness has been re-stated by this Court in Bannari Amman Sugars Ltd. Vs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the heart beat of fair play. Actions are amenable, in the panorama of judicial review only to the extent that the State must act validly for discernible reasons, not whimsically for any ulterior purpose. The meaning and true import and concept of arbitrariness is more easily visualized than precisely defined. A question whether the impugned action is arbitrary or not is to be ultimately answered on the facts and circumstances of a given case. A basic and obvious test to apply in such cases is to see whether there is any discernible principle emerging from the impugned action and if so, does it really satisfy the test of reasonableness." [Emphasis supplied] 39. MRF made a huge investment in the State of Kerala under a promise held to it that it would be granted exemption from payment of sales tax for a period of seven years. It was granted the eligibility certificate. The exemption order had also been passed. It is not open to or permissible for the State Government to seek to deprive MRF of the benefit of tax exemption in respect of its substantial investment in expansion in respect of compound rubber when the State Government had enjoyed the benefit from the investment made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accordingly, the provisions of the EPCG Scheme were implemented vide Customs Notification No.16/2015-Cus dated 1st April, 2015. It was submitted that after the commencement of the GST regime, Notification No.16/2015 came to be amended vide Notification No.26/2015-Cus dated 29.6.2017 by substituting the words and figure "under section 3" with the words and figures and brackets "under sub-sections (1), (3) and (5) of section 3" in the opening paragraph. It was pointed out that while making the aforesaid amendment, sub-sections (7) and (9) of section 3 of the Customs Tariff Act were not included. It was submitted that similarly, in paragraph 2 of the said notification in condition (6) for the words and figure "under section 3", the words and figures and brackets "under sub-sections (1), (3) and (5) of sub-section 3" came to be substituted; however, sub-sections (7) and (9) of section 3 were not included, which indicates that there was no intention to grant exemption from payment of IGST on import of capital goods. 4.1 It was submitted that to comply with the provisions of Notification No.26/2015-Cus dated 29.6.2017, the DGFT issued Trade Notice No.11/2018 dated 30.6.2017 which stipu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gainst the judgment and order dated 3-3-1983 of the High Court of Delhi. The appellants in these two appeals are engaged in the manufacture of aluminium conductors and aluminium conductors steel reinforced which are supplied to the various State Electricity Boards. Aluminium ingots and rods are the basic raw materials used in the production of such conductors. In order to meet the domestic requirements, it became necessary to import the aluminium ingots and aluminium rods. The Central Government therefore issued Notification No. 79-Cus. dated 18-4-1980 exempting aluminium wire rods and aluminium ingots from the whole of customs duty as well as the additional duty leviable on it. The notification contained the clause that the notification shall remain in force till 30-9-1980. Simultaneously, another Notification No. 80-Cus. was issued by the Central Government exempting the above items from the whole of auxiliary duty as well. The appellants claim that on the basis of the promise and assurance contained in the two exemption notifications, they commenced negotiations with the manufacturer and suppliers of the above items for the purchase of these items from abroad. In the meantime, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing an industry entitled to claim exemption for the entire specified period for which exemption had been promised to it at the time of giving incentive. Both these cases therefore cannot advance the case of the appellant and are distinguishable on facts because the exemption notification under Section 25 of the Act which was issued in this case did not hold out any incentive for setting up of any industry to use PVC resins and on the other hand had been issued in exercise of the statutory powers, in public interest and subsequently withdrawn in exercise of the same powers again in public interest. In our opinion, no justifiable prejudice was caused to the appellants in the absence of any unequivocal promise by the Government not to act and review its policy even if the necessity warranted and the "public interest" so demanded. Thus, in the facts and circumstances of these cases, the appellants cannot invoke the doctrine of promissory estoppel to question the withdrawal notification issued under Section 25 of the Act." 4.6 It was submitted that under the EPCG Scheme no incentive is given to the petitioner which it can hold against the Government and that the notification granting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from payment of duty flows from the provisions of Section 25(1) of the Customs Act. The power to exempt includes the power to modify or withdraw the same. Such an exemption by its very nature is susceptible of being revoked or modified or subjected to other conditions. The supersession or revocation of an exemption notification in the public interest is an exercise of the statutory power of the State under the law itself as is obvious from the language of Section 25 of the Act, but also from the General Clauses Act under which the authority has the power to issue a notification has the undoubted power to rescind or modify the notification in a like manner. The Court also examined the case of the appellant-petitioners that relying upon the Notification dated 15-3-1979, they had acted and the Government could not be permitted to go back on its assurance otherwise they would be put to huge loss. The Court dealt with this contention in the following words: "22. .. The courts have to balance the equities between the parties and indeed the courts would bind the Government by its promise "to prevent manifest injustice or fraud". The Court also quoted with approval the following obs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng with economic matters, where having regard to the nature of the problems greater latitude require to be allowed to the legislature. The question, however, is as to whether it can be done retrospectively, thereby taking away some right that had accrued in favour of another person?" 4.8 The decision of this court in Prashanti Medical Services and Research Foundation v. Union of India rendered on 14.9.2017 in Special Civil Application No.7558 of 2017 was relied upon, wherein it has been held thus:- "8. In plain terms, thus, this provision discontinued the deduction available under section 35AC from the assessment year commencing on or after 01.04.2018. In other words, any expenditure incurred after 01.04.2017 would no longer be eligible for deduction under the said section. The fact that the parliament had the competence to enact the said provision has nowhere been disputed before us. It is not even the stand of the petitioner that the parliament which granted the deduction could not have withdrawn it. In plain terms, a deduction is in the nature of waiver to a limited extent from payment of tax. In absence of such a deduction, the assessee incurring such expenditure would hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tionality of a statute and the burden is upon him who attacks it to show that there has been a clear transgression of the constitutional principles. This rule is based on the assumption, judicially recognised and accepted, that the legislature understands and correctly appreciates the needs of its own people, its laws are directed to problems made manifest by experience and its discrimination are based on adequate grounds. The presumption of constitutionality is indeed so strong that in order to sustain it, the court may take into consideration matters of common knowledge, matters of common report, the history of the times and may assume every state of facts which can be conceived existing at the time of legislation. 8. Another rule of equal importance is that laws relating to economic activities should be viewed with greater latitude than laws touching civil rights such as freedom of speech, religion etc. .... ... The court must always remember that "legislation is directed to practical problems, that the economic mechanism is highly sensitive and complex, that many problems are singular and contingent, that laws are not abstract propositions and do not relate to abstract units ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate of 4% ad valorem. This was done with a view to equalising the sale prices of indigenous and imported materials. The notification was challenged by the importers interalia on the ground that it breached the principle of promissory estoppel. Rejecting the challenge, the Supreme Court observed that the doctrine of promissory estoppel is part of the administrative law and is applicable against the Government also to prevent fraud and injustice and such doctrine must yield when the equity so demands if it can be shown having regard to the facts and circumstances of the case that it would be inequitable to hold the public authority to its promise, assurance or representation. It was observed that an exemption notification does not make the items which are subject to levy of customs duty as not leviable. It only suspends the levy and collection of customs duty wholly or partly as the case may be. Under section 25 of the Customs Act, if the Government had the power to grant exemption it also had the power to withdraw the same. 11. In case of Kothari Industrial Corporation (supra), the court held that the Government had the power to determine what should be the policy for grant or re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at Notification No.16/2015-Cus though issued in exercise of powers under section 25 of the Customs Act is not a statutory exemption in strict sense, inasmuch as, it has been issued to give effect to the EPCG Scheme and has its roots in the Foreign Trade Policy. It was submitted that such exemption has been granted to promote exports. 5.2 Reference was made to Notification No.16/2015-Cus dated 1st April, 2015 which has been issued in exercise of powers under section 25 of the Customs Act, to point out that by virtue of the notification, the Central Government has exempted the goods specified in Table-1 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 under section 3 of the Customs Tariff Act, when specifically imported by the importer. 5.3 It was pointed out that the exemption under the notification is subject to the conditions enumerated thereunder. It was submitted that the additional customs duty is levied under section 3 of the Customs Tariff Act and, therefore, import of goods is permitted at zero customs duty under the said notificati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 objective of the scheme and reads thus: "The objective of the EPCG Scheme is to facilitate import of capital goods for producing quality goods and services to enhance India's export competitiveness." 9. Para 5.01 of Chapter 5 which is relevant for the present purpose reads thus:- "5.01 EPCG Scheme. (a) EPCG Scheme allows import of capital goods for preproduction, production and post production at Zero customs duty. Alternatively, the Authorisation holder may also procure Capital Goods from indigenous sources in accordance with provision of paragraph 5.07 of FTP. Capital goods for the purpose of the EPCG Scheme sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reon 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. 13. Thus, on conjoint reading of the Chapter 5 of the Foreign Trade Policy and Notification No.16/2015-Cus dated 1st April, 2015, it is evident that though the notification is a statutory notification issued in exercise of powers under section 25 of the Customs Act, it is not an exemption notification simpliciter, but an exemption notification issued to give effect to the EPCG Scheme floated under the Foreign Trade Policy which is an incentive scheme. Thus, in the opinion of this court, Notification No.16/2015-Cus dated 1st April, 2015 and the amending notifications cannot be equated with statutory notifications ordinarily issued under section 25 of the Customs Act, granting exemption from payment of customs duty. 14. Considerin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion (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, on the value of the imported article as determined under sub-section (8) or sub-section (8A) as the case may be." "(9) Any article which is imported into India shall, in addition, be liable to the goods and services tax compensation cess at such rate, as is leviable under section 8 of the Goods and Services Tax (Compensation to States) Cess, 2017 on a like article on its supply in India, on the value of the imported article as determined under sub-section (10) or sub-section (10A) as the case may be." 19. Vide Notification No.26/2017-Customs dated 29th June, 2017 issued in exercise of powers under section 25 of the Customs Act, vide serial No.82, Notification 16/2015-Customs dated 1st April 2015 came to be amended with effect from 1.7.2017, which to the extent the same is relevant for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spectively, 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 the original para 5.01 (a) of the Foreign Trade Policy, EPCG Scheme allowed import of capital goods for preproduction, production and post production at zero customs duty. Thus, by virtue of the above notification, the words "Capital goods imported under EPCG scheme for physical exports are also exempt from whole of the Integrated Tax and Compensation Cess leviable under sub-section (7) and subsection (9) respectively, of section 3 of the Customs Act, 1975 as may be provided in the notification issued under Department of Revenue." came to be inserted in para 5.01. 25. Correspondingly, vide Notification No.79/2017-Customs, dated 13th October, 2017, Notification No.16/2015-Cus dated 1st April, 2015, came to be amended, whereby, in the opening paragraph, after clause (ii), the following came to be inserted: "(iii) the whole of integrated tax and the goods and services tax compen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct" 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 consideration is, whether it was permissible for the respondents to levy additional duty under section 3 of the Customs Tariff Act by way of integrated tax and goods and services compensation cess on the import of capital goods by the petitioner under the authorisation issued to it under the EPCG Scheme. 29. On behalf of the petitioner, it has been contended that the respondents are barred by the principle of estoppel from recovering any duty under section 3 of the Customs Tariff Act in view of the promise held out to it under the EPCG Scheme that it would be liable to pay zero customs duty; whereas according to the respondents, the power to grant exemption from payment of duty flows from the provisions of section 25(1) of the Customs Act. The power to exempt includes the power to modify or withdraw the same. Such an exemption by its very nature is susceptible to being revoked or modified or subjected to other conditions. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngly, the importer would be obliged to fulfill export obligation to the extent provided in the Scheme. Since exemption from payment of customs duty and additional duty can only be granted under section 25 of the Customs Act, to give effect to the promise held out in Foreign Trade Policy 2015-2020, Notification No.16/2015-Customs dated 1st April, 2015 came to be issued exempting import of goods covered by a valid authorisation issued under the EPCG Scheme in terms of Chapter 5 of the Foreign Trade Policy, from the whole of the customs duty leviable under the First Schedule to the Customs Tariff Act and the whole of the additional duty leviable under section 3 of the Customs Tariff Act. Accordingly, when the authorisation under the EPCG Scheme was issued in favour of the petitioner, and when the exporter issued commercial invoice in favour of the petitioner on 16.5.2017, the petitioner had reason to believe that it would not be required to discharge any liability in respect of customs duty leviable under the First Schedule to the Customs Tariff Act or any additional duty under section 3 of the said Act, inasmuch as, a promise was held out to the petitioner that it will not be liable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n has been issued under section 25 of the Customs Act, it has been issued for the purpose of implementing the EPCG Scheme which holds out a promise that import of capital goods under the scheme would be exempt from payment of additional duty under section 3 of the Customs Tariff Act. Therefore, the notification has to be read in the context of the EPCG policy keeping in mind the object envisaged by the policy and not in the strict sense as in the case of a general exemption under section 25 of the Customs Act. 35. In W.P.I.L. Ltd. v. Commissioner of Central Excise, Meerut. UP., (supra), the Supreme Court was dealing with a case where exemption in respect of power-driven pumps was also available to the manufacturers since 1978. In Notification No. 64/94-CE dated 1.3.1994 whereby exemption qua 389 earlier notifications was rescinded, the notification in respect of the part of power-driven pumps was also included as rescinded. Thereafter, the same item was again exempted by Notification No. 95/94-CE issued on 25.4.1994. In this manner, insofar as parts of power-driven pumps are concerned, there was no exemption in respect thereof for the period from 1.3.1994 to 24.4.1994. The assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of India was correcting an inadvertent error or an unintentional withdrawal of the exemption; and if that be so, the exemption notification dated 6.7.2016 must be viewed as clarificatory or curative in nature; and that any other view would leave the said class of exporters uncovered for a period of about three weeks allowing the department to levy the export duty which was a wholly unintended consequence of the Government of India policy. The court formed such opinion on the basis of the precedents of the Supreme Court in WPIL Ltd. v. CCE, (supra) and Ralson (India) Ltd. v. CCE. The court accordingly, allowed the writ petition and declared that the notification dated 6.7.2016 with all its terms and conditions would apply for the period 16.6.2016 to 6.7.2016 also and granted consequential relief. 38. In the facts of the present case, import of capital goods under a valid authorisation under the EPCG Scheme was wholly exempt from payment of any additional duty under section 3 of the Customs Tariff Act. The intention of the Central Government while framing the EPCG Scheme was to permit export at zero customs duty. Accordingly, by Notification No.16/2015-Cus dated 1st April, 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the conditions contained in the Foreign Trade Policy, 2015-2020 and the exemption Notification No.16/2015-Cus dated 1st April 2015 as amended from time to time, the petitioner would continue to enjoy exemption from payment of additional duty under sub-section (7) and sub-section (9) of section 3 of the Customs Tariff Act even during the period 1.7.2017 to 13.10.2017 and is, therefore, entitled to refund of the additional duty paid by it under sub-sections (7) and (9) of section 3 of the Customs Tariff Act. 39. Insofar as the decision of the Supreme Court in Kasinka Trading v. Union of India, (supra) is concerned, the grievance of the appellants was that the withdrawal of the exemption notification on 29.8.1980 was not at all justified and support for this argument was sought from the fact that within ten days of the withdrawal notification, the Government had itself once again issued a notification on 9.9.1980, reviving the exemption of customs duty. The learned counsel had submitted that during the period of ten days, the importers whose goods arrived in India were made liable to pay both the customs duty as well as the auxiliary duty, while those whose goods arrived either a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 was issued in exercise of powers under section 25 of the Customs Act, for the purpose of implementing the incentive scheme for import of capital goods under the EPCG Scheme. The above decision, therefore, does not further the case of the respondents. 41. In Director General of Foreign Trade v. Kanak Exports (supra), on which reliance has been placed by the learned senior standing counsel for the respondent, the Supreme Court followed its earlier decision in the case of Kasinka Trading v. Union of India, (supra), which as discussed hereinabove does not support the case of the respondents. 42. In the light of the above discussion, the petition succeeds and is, accordingly, allowed. 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. The impugned order-in-original dated 29.9.2018 is hereby quashed and set aside and it is held that the petitioner is entitled to refund of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
