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TMI Blog2022 (11) TMI 1046X X X X Extracts X X X X X X X X Extracts X X X X ..... xport promotion capital goods/100% export oriented units upto 31st March 2018 and to continue the existing monitoring scheme for exports. Keeping in mind the the fact that even the Government of India was conscious of the problems faced by the exporters and the fact that the exemption has continued to be extended periodically and is valid even as on date, it is apparent that it was on account of inadvertence 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. Since we have held that the amendment to Notification No.16/2015-Cus dated 1st April 2015 was clarificatory/curative in nature, consequences have to follow inasmuch as Petitioner will be entitled to refund of the IGST paid by Petitioner. The refund shall be processed and paid together with interest, if any, within four weeks of Petitioner reversing the entries of availment of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Foreign Trade Policy were exempted from the whole of the additional duty leviable under Section 3 of the Customs Tariff Act. When the GST regime came into force, Section 3 of the Customs Tariff Act came to be amended by insertion of Sub Section (7) and Sub Section (9) that provided for levy of Integrated Tax and Goods and Services Compensation Cess. Corresponding amendment was made in Notification No. 16/2015-Cus vide Notification No. 26/2017-Cus dated 29th June 2017. In the Notification No.26/2017, the import under the EPCG Scheme which was exempted from additional duty under Sub Section (7) and Sub Section (9) of Section 3 of the Customs Tariff Act was not included. However, within a short time thereafter in Notification dated 13th October 2017 being amended Notification No.16/2015-Cus came to be issued and the imports under the EPCG Scheme were exempted from additional duty under Sub Section (7) and Sub Section (9) of the Customs Tariff Act. It is petitioner s case that during this period, i.e., from 1st July 2017 when Notification No. 16/2015-Cus came into effect and the fresh amendment dated 13th October 2017 came into effect, petitioner paid Integrated Goods and Service T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es troubling the export sector and to recommend a suitable strategy for helping this sector. (emphasis supplied) 5. Various issues were identified by the Committee after interacting with all concerned and examining the representations received. The Committee was conscious that there were core issues which needed immediately to be addressed to encourage export in the GST environment. One of that was working capital blockage for manufacturer exporters including EOUs due to requirement of upfront payment of GST on inputs and capital goods. On this issue of working capital blockage, the Committee proposed two options for resolving the same. The Committee observed that holders of advance authorisations/EPCG/100% EOUs earlier procured their inputs/capital goods, etc., meant for export production duty free, but now have to pay GST thereon. It was also observed that likewise, merchant exporters procured their goods for export free of central duties, but they now have to pay GST. This gave rise to the problem of cash blockage, which has also got accentuated due to delay of refunds. Keeping this fact in mind, two options of resolution were proposed. Option one was exemption on IGST an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... easures, the exports might collapse. Shri Alok Chaturvedi, Director General of Foreign Trade (DGFT) stated that the size of the problem of funds blockage for the exporters could be gauged from the fact that the revenue foregone for one year from advance authorization, EOU and EPCG was around Rs.45,000 crore. He stated that Rs. 28,000 crore of duty foregone was due to advance authorization scheme, Rs.9,000 crore was due to EPCG and Rs. 8,000 was due to EOUs scheme. He emphasised that exporters were facing competition in the international market and they had to compete against exporters from countries like Bangladesh, Vietnam, Cambodia and Philippines. He also reminded that Indian exporters faced problems in relation to infrastructure, lack of flexible labour laws and lack of economies of scale. He stated that the exporters needed support for the next seven to eight months and the system of e-Wallet could be developed by then. 7. After discussing and considering all the pros and cons and after being conscious of the fact that the basic structure of GST was not to grant exemptions, the GST Council decided to grant exemption from IGST, Cess, etc., under Section 6 of the IGST Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er :- 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, 2015, goods covered by a valid authorisation issued under the EPCG Scheme in terms of Chapter 5 of the Foreign Trade Policy were inter alia exempted from the whole of the additional duty leviable under Section 3 of the Customs Tariff Act. However, when the GST regime came into force, while Section 3 of the Customs Tariff Act came to be amended by inserting sub-sections (7) and (9) providing for levy of Integrated Tax and Goods and Service Compensation Cess, in the corresponding amendment made in Notification No.16/2015-Cus. vide Notification No.26/2017-Cus., dated 29 th June, 2017, sub-section (7) and sub-section (9) of Section 3 were left out. However, within a short time thereafter, vide notification dated 13th October, 2017, Notification No.16/2015- Cus. came to be further amended and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Gujarat High Court has followed Prince Spintex Pvt. Ltd.(supra) and Paragraphs 2, 3 and 4 read as under :- 2. It has been fairly conceded by the Learned Standing Counsel appearing for the Union of India as well as by the Learned Counsel appearing for the respondents Nos. 2 and 3 that the issue raised in this writ application is squarely covered by the judgment of this Court in the case of M/s. Prince Spintex Pvt. Ltd. v. Union of India; Special Civil Application No.10756 of 2018; decided on 3-2-2020 [2020(35)G.S.T.L. 261 (Guj.)]. We quote the relevant operative part of the judgment referred to above as under : 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 peti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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