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2020 ] PRINCE SPINTEX PVT. LTD. v. UNION OF INDIA 261
2020 (35) G.S.T.L. 261 (Guj.)

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
Harsha Devani and Sangeeta K. Vishen, JJ.
PRINCE SPINTEX PVT. LTD.
Versus
UNION OF INDIA
R/Special Civil Application No. 20756 of 2018, decided on 3-2-2020
Import under Export Promotion Capital Goods (EPCG) Scheme - Levy
of IGST - Amendment to Notification No. 16/2015-Cus. with effect from 1-7-
2017 by Notification No. 26/2017-Cus. - Validity - Requirement for importers to
pay IGST and take Input Tax Credit as applicable under GST Rules - Notifica-
tion No. 16/2015-Cus. though statutory notification issued in exercise of pow-
ers under Section 25 of Customs Act, 1962 but not an exemption notification
simpliciter - Said notification issued to give effect to EPCG Scheme floated
under Foreign Trade Policy, an incentive scheme - Said notification and
amending notifications cannot be equated with statutory notifications ordinar-
ily issued - Commercial invoice issued by exporter on 16-5-2017 but Goods and
Services Acts coming into force before actual import of goods - Notification
No. 79/2017-Cus. amending Notification No. 16/2015-Cus. with effect from
13-10-2017 and import of capital goods covered by a valid authorisation under
EPCG Scheme exempted from payment of Integrated Tax and Goods and Ser-
vices Tax Compensation Cess - No express provision exempting import of
goods under EPCG Scheme from payment of Integrated Tax for short-period
from 1-7-2017, when Integrated Goods and Services Tax Act, 2017 came into
force till 13-10-2017 - Clear that intention of Central Government was to grant
that total exemption from payment of additional duty under EPCG Scheme -
Notification No. 26/2015-Cus. to extent it limited exemption from payment of
additional duty under Section 3 of Customs Tariff Act, 1975 to sub-sections (1),
(3) and (5) thereof, repugnant to policy declared by Central Government under
Chapter 5 of Foreign Trade Policy, 2015-20 - Action of Authorities in levying
Integrated Tax and Compensation Cess on import of capital goods by assessee
under a valid authorisation under EPCG Scheme not being in consonance with
Foreign Trade Policy, 2015-20 not sustainable - Addl. D.G.F.T. Trade Notice
No. 11/2018, dated 30-6-2017, to extent it states therein that under Chapter 5
importers would need to pay IGST also rendered unsustainable - Consequent-
ly, subject to fulfilment of conditions contained in Foreign Trade Policy, 2015-
20 and exemption Notification No. 16/2015-Cus. as amended from time to time,
assessee continue to enjoy exemption from payment of additional duty under
sub-section (7) and sub-section (9) of Section 3 of Customs Tariff Act, 1975
even during period 1-7-2017 to 13-10-2017 - Assessee entitled to refund of addi-
tional duty paid by it during said period. - Though the exemption notification 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. It was

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