Page 73 - GSTL_16 April 2020_Vol 35_Part 3

2020 ] PRINCE SPINTEX PVT. LTD. v. UNION OF INDIA 287
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 exempt-
ed 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 29th 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 imports under EPCG Scheme were exempted
from additional duty under sub-section (7) and sub-section (9) of the Customs
Tariff Act. It is therefore, 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 in-
tention 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. Notification No. 79/2017, dated 13th October, 2017, therefore, has to
be read as clarificatory or curative in nature, inasmuch as, otherwise it would
leave as whole class of importers who had imported capital goods, uncovered
during the period 1-7-2017 to 13-10-2017, allowing the department to levy addi-
tional duty under sub-sections (7) and (9) of the Customs Tariff Act on such im-
ports, despite the fact that the Foreign Trade Policy 2015-2020 envisages imports
under the EPCG Scheme at zero customs duty. Under the circumstances, the ac-
tion of the respondents in levying Integrated Tax and Compensation Cess on the
import of capital goods by the petitioner under a valid authorisation under the
EPCG Scheme, not being in consonance with the Foreign Trade Policy 2015-2020
cannot be sustained. For the same reasons, Trade Notice No. 11/2018, dated 30-6-
2017, to the extent it is stated therein that under Chapter 5 importers would need
to pay IGST, is also rendered unsustainable. Consequently, subject to fulfilment
of the conditions contained in the Foreign Trade Policy, 2015-2020 and the ex-
emption 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 Cus-
toms 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 notifica-
tion 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 after 9-9-1980 or before
29-8-1980 were not required to pay the same. The Supreme Court observed that
in the absence of any material placed before the High Court or even in the appeal
to establish that the notification dated 29-8-1980 was issued for any oblique or
GST LAW TIMES  16th April 2020  193