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2020 ] PRINCE SPINTEX PVT. LTD. v. UNION OF INDIA 283
ports are also exempt from whole of the Integrated Tax and Compensation Cess
leviable under sub-section (7) and sub-section (9) respectively, of Section 3 of the
Customs Tariff 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-Cus., 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-
sation cess leviable thereon under sub-section (7) and sub-section (9) of sec-
tion 3 of the Customs Tariff Act :
Provided that the exemption from integrated tax and the goods and ser-
vices tax compensation cess shall be available up to the 31st March, 2018.”
26. Thus, with effect from 13th October, 2017, import of capital goods
covered by a valid authorisation under the EPCG Scheme was exempted from
payment of integrated tax under sub-section (7) of Section 3 of the Customs Tar-
iff Act and Goods and Services Tax Compensation Cess under sub-section (9) of
Section 3 of the said Act. Therefore, it is only for the short period from 1st July,
2017, when the IGST Act came into force till 13th October, 2017, when the above
notification came to be issued, that there was no express provision exempting
import of goods under the EPCG Scheme from payment of integrated tax.
27. Thus, import of capital goods under the EPCG Scheme was totally
exempt from payment of customs duty and additional duty, except for the short
period between the coming into force of the IGST Act till the amendment in the
Foreign Trade Policy 2015-20 vide Notification No. 33/2015-2020, dated 13th Oc-
tober, 2017 issued in exercise of powers conferred by Section 5 of Foreign Trade
(Development and Regulation) Act, 1992 read with paragraph 1.02 of the Foreign
Trade Policy, 2015-20, and corresponding amendment in Notification No.
16/2015-Cus., dated 1st April, 2015. The intention of Central Government is,
therefore, clear that total exemption from payment of additional duty was to be
granted under the EPCG Scheme. This was also the promise held out to the peti-
tioner and similarly situated persons when they were granted the authorisation
under the EPCG Scheme. At the time when the authorisation was granted, by
virtue of Notification No. 16/2015-Cus., dated 1st April, 2015, there was total
exemption from payment of additional duty under Section 3 of the Customs Tar-
iff Act. However, subsequently, upon the coming into force of the GST regime,
while Section 3 of the Customs Tariff Act came to be amended by inserting sub-
sections (7) and (9) therein imposing additional customs duty in the nature of
Integrated Tax and Goods and Services Compensation Cess respectively, and
though Notification No. 16/2015-Cus., dated 1st April, 2015 came to [be] amend-
ed by substituting the words and figure “Section 3 of the Customs Tariff Act”
with the words and figures and brackets “sub-sections (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 permis-
sible 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.

GST LAW TIMES  16th April 2020  189