Page 64 - GSTL_16 April 2020_Vol 35_Part 3

278 GST LAW TIMES [ Vol. 35
4.9 It was contended that, therefore, even if based upon an exemption
notification, a party has changed its position; it cannot hold the Government to
the promise. It was submitted that in any case, though the petitioner is not ex-
empted from payment of IGST, the amount paid towards IGST is given back by
way of input tax credit. It was, accordingly, urged that the petition being devoid
of any merit or substance deserves to be dismissed.
5. In rejoinder, Mr. Kuntal Parikh, Learned Advocate for the petitioner,
invited the attention of the Court to the objective of the Export Promotion Capital
Goods Scheme which 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 compet-
itiveness.”
5.1 It was submitted that the objective shows that it was an incentive
scheme. It was submitted that the zero customs duty is the incentive and there is
a corresponding obligation cast upon the importer. It was submitted that Notifi-
cation 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 Govern-
ment 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 sub-
ject to the conditions enumerated thereunder. It was submitted that the addition-
al customs duty is levied under Section 3 of the Customs Tariff Act and, there-
fore, import of goods is permitted at zero customs duty under the said notifica-
tion.
5.4 Reference was made to paragraph 6 of Notification No. 16/2015-
Cus. which reads thus :
“6. That if the importer does not claim exemption from the additional du-
ty leviable under section 3 of the Customs Tariff Act, 1975, the additional
duty so paid by him shall not be taken for computation of the net duty
saved for the purpose of fixation of export obligation provided the Cenvat
credit of additional duty paid has not been taken;”
5.5 It was submitted that IGST is also an additional duty of customs
and the exemption from duty under Section 3 of the Customs Tariff Act contin-
ues under the Foreign Trade Policy. Therefore, if additional duty leviable under
Section 3 of the Customs Tariff Act is not claimed and Cenvat credit is not taken
then the corresponding export obligation is reduced. It was submitted that the
benefit of input tax credit was available under Notification No. 16/2015-Cus. and
continues after the issuance of the new notification amending the earlier notifica-
tion.

GST LAW TIMES  16th April 2020  184