M/S. Sanathan Textile Pvt. Ltd. ... vs Union Of India, Thru The ...
2022 Latest Caselaw 10403 Bom

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         Digitally
                      IN THE HIGH COURT OF JUDICATURE AT BOMBAY
         signed by
PURTI
         PURTI
         PRASAD               CIVIL APPELLATE JURISDICTION
PRASAD   PARAB
PARAB    Date:
         2022.10.13
         10:58:22
         +0530
                             WRIT PETITION NO. 157 OF 2019

M/s. Sanathan Textile Pvt. Ltd.                              ....Petitioner
     V/s.
Union of India and Anr.                                      ...Respondents

                                    ----
Mr. V. Raghuraman, Senior Advocate a/w Mr. Raghavendra, Mr. Shailesh
Seth and Mr. Prabhakar K. Shetty for Petitioner.
Mr. J.B. Mishra, Senior Advocate a/w Mr. Anjani Kumar Singh for
Respondent Nos. 1 and 2.
                                     ----

                                        CORAM : K.R. SHRIRAM &
                                                A.S. DOCTOR, JJ.

DATED : 10th OCTOBER 2022

P.C. :

1. Heard Mr. Raghuraman and Mr. Mishra and as we understand

the facts of this case, import of capital goods under the valid authorisation

under the Export Promotion Capital Goods Scheme (EPCG Scheme) was

wholly exempted from payment of any additional duty under Section 3 of

the Customs Tariff Act. Petitioner has availed of this EPCG Scheme.

2. The intention of the Central Government while framing EPCG

Scheme was to permit import at zero customs duty. Accordingly, by

Notification No. 16/2015-Cus dated 1st April 2015 goods covered by valid

authorisation issued under the EPCG Scheme in terms of Chapter 5 of 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

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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 Tax (IGST) amounting to

Rs.24,94,53,580/- on the capital goods imported by petitioner. The details

of the bills of entries are provided in the petition.

3. Mr. Raghuraman submitted that the fact that within a short

time the original Notification No.16/2015 came to be further amended itself

makes it apparent that it was on account of inadvertence or oversight while

amending Notification No.16/2015-Cus by Notification No. 26/2017-Cus

dated 29th June 2017. The words "figures and brackets Sub Section (7) and

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Sub Section (9)" were not inserted and 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.

4. Mr. Raghuraman added that it is more so because customs duty

was always exempted and therefore Notification No. 79/2017-Cus dated

13th October 2017 has to be read as clarificatory or curative in nature, in as

much as, otherwise it would leave whole class of importers who had

imported capital goods uncovered from period 1st July 2017 to 13th October

2017. Mr. Raghuraman placed reliance on a judgment of the Gujarat High

Court in Prince Spintex Pvt. Ltd. vs. Union of India1.

5. In our view, it would also assist the court if respondents place

on record the Minutes of Meeting recorded alongwith discussion notes, file

notings, representations received and the agenda placed before the Central

Board of Indirect Taxes and Customs (CBI & C) that resulted in issuance of

Notification No.79/2017 dated 13th October 2017. Ordered accordingly.

6. We would like to dispose this matter before diwali holidays start

and therefore respondents are directed to file an affidavit placing the

documents/details on record as noted in paragraph 5 above and serve a

copy thereof upon petitioner by 18th October 2022.

1 2020 (35) G.S.T.L. 261 (Guj)
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7.            Stand over to 20th October 2022.




(A.S. DOCTOR, J.)                                (K.R. SHRIRAM, J.)




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