Gujarat High Court
Trushna Exim vs Union Of India on 21 November, 2025
Author: A.S. Supehia
Bench: A.S. Supehia
NEUTRAL CITATION
C/SCA/18747/2018 JUDGMENT DATED: 21/11/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 18747 of 2018
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE A.S. SUPEHIA
and
HONOURABLE MR. JUSTICE PRANAV TRIVEDI
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Approved for Reporting Yes No
✔
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TRUSHNA EXIM.
Versus
UNION OF INDIA & ORS.
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Appearance:
MR HARDIK P MODH(5344) for the Petitioner(s) No. 1
MS. SHRUNJAL SHAH, ASSISTANT GOVERNMENT PLEADER for the
Respondent(s) No. 2,4,5
MR UTKARSH R SHARMA(6157) for the Respondent(s) No. 3
MR. PARTH H BHATT(6381) for the Respondent(s) No. 1
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CORAM:HONOURABLE MR. JUSTICE A.S. SUPEHIA
and
HONOURABLE MR. JUSTICE PRANAV TRIVEDI
Date : 21/11/2025
ORAL JUDGMENT
(PER : HONOURABLE MR. JUSTICE PRANAV TRIVEDI)
1. Heard learned advocate Mr. Hardik Modh for the petitioner, learned Assistant Government Pleader Ms. Shrunjal Shah for respondent Nos. 2,4 and 5, learned advocate Mr. Parth Bhatt for respondent No.1 and learned Senior Standing Counsel Mr. Utkarsh Sharma for respondent No.3.
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2. Rule returnable forthwith. Learned Assistant Government Pleader Ms. Shrunjal Shah waives service of notice of rule for and on behalf of respondent Nos. 2, 4 and 5, learned advocate Mr. Parth Bhatt waives service of notice for respondent No.1 and learned Senior Standing Counsel Mr. Utkarsh Sharma waives service of notice of rule for respondent No.3.
3. Having regard to the controversy arising in this petition, which is in a narrow compass, with the consent of the learned advocates for the respective parties, the same is taken up for final hearing.
4. By way of the present petition under Article 226 of the Constitution of India, the petitioner prays for issuance of writ or direction to re-
assess the impugned Bill of Entry No. 3192332 dated 11.09.2017 issued by the respondent as well as further restrict confirmation of the payment of Integrated Goods and Services Tax Act, 2017 Page 2 of 19 Uploaded by SAJ GEORGE(HC01069) on Thu Dec 11 2025 Downloaded on : Fri Dec 12 21:39:14 IST 2025 NEUTRAL CITATION C/SCA/18747/2018 JUDGMENT DATED: 21/11/2025 undefined (hereinafter referred to as 'IGST') amounting to Rs.1,73,87,662/- on the capital goods imported by the petitioner from Japan vide Invoice No. CTL-
184/17 dated 14.05.2017 and cleared from custom vide Bill of Entry No. 3192332 dated 11.09.2017.
It was further prayed to re-assess Bill of Entry No. 3192332 and grant refund of duties/ taxes paid.
5. The brief facts leading to the filing of the present writ petition is that the petitioner is a partnership firm and is, inter alia, registered under the provisions of Central Goods and Service Tax Act, 2017 (hereinafter referred to as 'the Act' for short).The petitioner imports capital goods without payment of customs duties i.e. zero customs duty under the Export Promotion Capital Goods Scheme (hereinafter referred to as 'EPCG Scheme' for short). The EPCG licence/ authorisation was obtained by the petitioner on 07.03.2017 having Authorisation No. 5230023679.
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6. It is the case of the petitioner that the benefit of zero customs duty for the imported capital goods is granted under the EPCG Scheme under which the authorisation holder is eligible for zero custom duty on the capital goods imported under the valid EPCG authorization. The EPCG Scheme for granting the benefit of zero custom duty to imported capital goods, which are used for finished goods which are exported is contained in Chapter 5 of Foreign Trade Policy of 2015-2020.
7. It is the case of the petitioner that the impugned import of capital goods was eligible for exemption of both 'Basic Customs Duty' (BCD) as well as Additional Duty of Customs under Section 3 of the Customs Tariff Act, 1975 (hereinafter referred as Counter Vailing Duty- CVD) as the Petitioner obtained EPCG authorisation for claiming the benefit of zero custom duty.
However, in view of the specific provisions of Page 4 of 19 Uploaded by SAJ GEORGE(HC01069) on Thu Dec 11 2025 Downloaded on : Fri Dec 12 21:39:14 IST 2025 NEUTRAL CITATION C/SCA/18747/2018 JUDGMENT DATED: 21/11/2025 undefined Section 5 of IGST Act, the Parliament had passed "THE TAXATION LAWS (AMENDMENT) ACT, 2017" for which Presidential assent was granted on 5th May 2017, which, inter alia, amended the provisions of Section 3 of the Customs Tariff Act, 1975 to substitute the provisions of sub-sections (7) and (8) and also insert sub-sections (9) to (12) to Section 3 of the Customs Tariff Act, 1975 to specifically levy IGST on the imported goods.
8. It is the case of the petitioner that the petitioner was subjected to levy of IGST on the capital goods imported by them, however, the petitioner was in the action of exporting goods and, therefore, the petitioner filed refund application in Form GST RFD-01A on 16.11.2017 for claiming the refund of input tax credit. The petitioner also provided all the necessary documents for refund claim. The refund claim was rejected by the Deputy Commissioner of State Taxes (hereinafter referred to as 'the Page 5 of 19 Uploaded by SAJ GEORGE(HC01069) on Thu Dec 11 2025 Downloaded on : Fri Dec 12 21:39:14 IST 2025 NEUTRAL CITATION C/SCA/18747/2018 JUDGMENT DATED: 21/11/2025 undefined respondent' for short) vide Order No. 3293 dated 18.01.2018 issued in Form GST-RFD-06, inter alia, giving the reason that as per Section 2(59), 2(62), 2(63) as well as Sections 16, 17 and 18 of the Act, the refund of input tax paid on purchase of capital goods is not allowable. This rejection of refund claim is impugned in the present writ petition.
9. Mr. Hardik Modh, learned advocate for the petitioner submitted that the rejection of refund claim is legally untenable inasmuch as there is no distinction of input tax credit as to whether it is availed on 'inputs' or 'capital goods' in view of the fact that term 'input tax' defined in Section 2(62) clearly covers all Central tax, State tax and Integrated tax or Union Territory tax charged on any supply of goods or services or both.
10. It is submitted by learned advocate Mr. Modh Page 6 of 19 Uploaded by SAJ GEORGE(HC01069) on Thu Dec 11 2025 Downloaded on : Fri Dec 12 21:39:14 IST 2025 NEUTRAL CITATION C/SCA/18747/2018 JUDGMENT DATED: 21/11/2025 undefined that the rejection of refund claim by the respondent is without any legal basis in as much as the definition of 'input tax' in Section 2(62) read with provisions of Section 16 of the Act clearly entitles the petitioner to take credit of input tax credit of the IGST paid on capital goods and, therefore, the Petitioner was entitled to claim the refund of input tax credit availed on the IGST paid on capital goods imported by them.
11. It is submitted by learned advocate Mr. Modh that the levy of IGST sought to be made under Section 3(7) of the Customs Tariff Act, 1975 is unconstitutional. The levy of Integrated Tax is covered under the provisions of Section 5 of the IGST ACT, 2017. Proviso to Section 5(1) of the IGST Act, 2017states that the integrated tax on goods imported into India shall be levied and collected in accordance with the provisions of Section 3 of the Customs Tariff Act, 1975 on the Page 7 of 19 Uploaded by SAJ GEORGE(HC01069) on Thu Dec 11 2025 Downloaded on : Fri Dec 12 21:39:14 IST 2025 NEUTRAL CITATION C/SCA/18747/2018 JUDGMENT DATED: 21/11/2025 undefined value as determined under the said Act. Perusal of Section 3(7) of the Customs Tariff Act, 1975 would show that the said provision levies an integrated tax at such rates not exceeding 40% as is leviable under section 5 of the IGST Act, 2017. The term "integrated tax" is not defined under the Customs Act, 1962 nor under the Customs Tariff Act, 1975. It is submitted that the Customs authorities could have collected an additional duty of customs only and not levied an 'integrated tax' on imports. It is submitted that the words used in Section 3(7) of the Custom Tariff Act, 1975 "as is leviable under Section 5 of the IGST Act, 1975", refers to the rate that can be charged only. Therefore, it is submitted that in the absence of charging section specifically referring to a charge of duty of customs, the charge would fail. It is submitted that where the charge fails, the collection of tax would be without authority of law transgressing the provisions of Article 265 of Page 8 of 19 Uploaded by SAJ GEORGE(HC01069) on Thu Dec 11 2025 Downloaded on : Fri Dec 12 21:39:14 IST 2025 NEUTRAL CITATION C/SCA/18747/2018 JUDGMENT DATED: 21/11/2025 undefined the Constitution. In wake of such submissions, learned advocate Mr. Modh has prayed to allow the present writ petition.
12. Per contra, Ms. Shrunjal Shah, learned Assistant Government Pleader has submitted that the issue is now no more res integra and is covered by the decision of this Court in the case of Prince Spintex Pvt. Ltd. v. Union of India, reported in 2020(35) GSTL 261 (Guj). In view of such submission, Ms. Shrunjal Shah requested this Court to pass appropriate order.
13. Having heard the learned advocates for the respective parties and having perused the material on record, the small issue which falls for consideration before us is with regards to refund of the IGST paid on the export of capital goods. We may refer to the decision of this Court in case of Prince Spintex Pvt. Ltd. v. Union of India (supra) has held as under:
Page 9 of 19 Uploaded by SAJ GEORGE(HC01069) on Thu Dec 11 2025 Downloaded on : Fri Dec 12 21:39:14 IST 2025NEUTRAL CITATION C/SCA/18747/2018 JUDGMENT DATED: 21/11/2025 undefined "2.5 In terms of section 7(2) of the IGST Act, import of goods is deemed to be inter-State supply of goods. Under sub-section (1) of section 5 the IGST Act, IGST is payable on import of goods into India. Accordingly, section 3 of the Customs Tariff Act was also amended with effect from 1.7.2017 and IGST became payable under sub-section (7) of section 3 of the Customs Tariff Act on import of goods into India. Simultaneously, Notification No.16/2015-Cus dated 1.4.2015 also came to be amended with effect from 1.7.2017 by Notification No.26/2017-Cus dated 29.6.2017, whereby in the opening paragraph in clause (ii) for the words and figures "under section 3", the words, figures and brackets "under sub-
sections (1), (3) and (5) of section 3" came to be substituted. The second respondent - DGFT issued a Trade Notice bearing No.11/2018 dated 30.6.2017 wherein it was stated that the importers would need to pay IGST and take input tax credit as applicable under the GST rules. Due to such amendment in Notification No.16/2015-Cus with effect from 1.7.2017, IGST payable under sub-section (7) of section 3 of the Customs Tariff Act was left out from exemption.
2.6 It is the case of the petitioner that though sub-section (7) of section 3 of the Customs Tariff Act is excluded from exemption of additional customs duty granted under Notification No.16/2015, in the present case, the petitioner had already opened 100% irrevocable letter of credit before such restriction came to be imposed vide Notification No.26/2017- Cus and the goods were imported during the validity period of an irrevocable letter of credit. Further, on the basis of the exemption granted under Notification No.16/2015-Cus, the petitioner expanded its business and thus, vested rights had also accrued in favour of the petitioner before Notification No.26/2017 came into force with effect from 1.7.2017.
2.7 On 3.8.2017, the petitioner filed Bill of Entry No.2714414 dated 3.8.2017 to clear the goods for home consumption wherein it claimed exemption from basic customs duty and IGST on the basis of the EPCG authorisation issued to it by the DGFT. Though the fifth respondent - Deputy Commissioner of Customs allowed exemption from payment of basic customs duty on the basis of the EPCG authorisation, he did not allow the petitioner to clear the goods without payment of IGST of Rs.2,38,83,203/- at the rate of 18% of the total value of Rs.13,26,84,462/-.
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2.9 As the petitioner was not allowed to clear the capital goods without payment of IGST, it had no option but to pay Rs.2,38,83,203/- as IGST and such amount was reflected by it as IGST credit in its electronic credit ledger. It is the case of the petitioner that it has not utilised any amount till date and it is shown as receivable in its books of account. Thus, the petitioner had made payment of IGST under protest to get its capital goods cleared for home consumption.
2.10 Subsequently, vide Notification No.33/2015-20 dated 13.10.2017, certain amendments were made in Chapter 5 of Foreign Trade Policy 2015-20, whereby capital goods imported under the EPCG Scheme for physical exports also came to be exempted from the whole of the integrated tax and compensation cess leviable thereon under sub-section (7) and sub- section (9) respectively of section 3 of the Customs Tariff Act. Pursuant to the amendment in the Foreign Trade Policy 2015-20, the original Notification No.16/2015-Cus came to be amended vide Notification No.79/2017-Cus dated 13.10.2017 making corresponding amendments. Thus, with effect from 13.10.2017 EPCG authorisation holders were allowed to claim exemption from the whole of IGST payable under sub- section (7) of section 3 of the Customs Tariff Act on the import of goods. Thus, the importers who cleared the capital goods during the period 1.7.2017 to 12.10.2017 were not granted exemption from additional duty of customs though they were holding valid EPCG authorisation.
2.11 The petitioner filed a refund application dated 28.4.2018 before the Assistant Commissioner (Customs), ICD, Ahmedabad on 8.6.2018 and claimed that the import was planned under EPCG licence on the premise that no duty of customs whatsoever would be payable upon undertaking export obligation as stipulated in Foreign Trade Policy and sudden levy of huge amount of IGST resulted in blocking of huge Page 11 of 19 Uploaded by SAJ GEORGE(HC01069) on Thu Dec 11 2025 Downloaded on : Fri Dec 12 21:39:14 IST 2025 NEUTRAL CITATION C/SCA/18747/2018 JUDGMENT DATED: 21/11/2025 undefined working capital funds because in project financing this was not anticipated and hence, was not considered on project cost based on which project finance was tied up. Further vide Notification No.79/2017 dated 13.10.2017, imports were again exempted from payment of all duties of customs including IGST for EPCG holder.
2.12 The fifth respondent issued a show cause notice dated 18.8.2018 proposing to reject the refund application of the petitioner. The petitioner filed its reply dated 6.9.2018 in the personal hearing granted to it on 7.9.2018 in pursuance to the said show cause notice. By the impugned order-in-original dated 29.9.2018, the fifth respondent rejected the refund application on the ground that on the date of filing bill of entry, that is, 3.8.2017, no notification granting exemption from payment of IGST was in force and, therefore, such IGST was chargeable on the said imported goods and it was correctly paid by the petitioner. Being aggrieved, the petitioner has filed the present petition seeking the reliefs noted hereinabove.
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37. In Shree Renuka Sugars Ltd. v. Union of India, (supra), this court was dealing with a case where the Government of India withdrew the exemption from payment of duty on export of sugar with the objective of controlling the domestic sugar prices, which had nothing to do with exporters like the petitioners therein. Raw sugar imported against advance authorisation on the condition of re-export had no impact on domestic sugar price. Imposing export duty on such exports did not serve the purpose for controlling local sugar prices. Apparently, since inadvertently the withdrawal of exemption also hit the exports of sugar against advance authorisation, the Government of India on the representations made by the trade, quickly reintroduced the exemption limited to such class. The court was of the view that it was very clear that the Government of India was correcting an inadvertent error or an unintentional withdrawal of the exemption; and if that be so, the exemption notification dated 6.7.2016 must be viewed as clarificatory or curative in nature; and that any other view would leave the said class of exporters uncovered for a period of about three weeks allowing the department to levy the export duty which was a wholly unintended consequence of the Government of Page 12 of 19 Uploaded by SAJ GEORGE(HC01069) on Thu Dec 11 2025 Downloaded on : Fri Dec 12 21:39:14 IST 2025 NEUTRAL CITATION C/SCA/18747/2018 JUDGMENT DATED: 21/11/2025 undefined India policy. The court formed such opinion on the basis of the precedents of the Supreme Court in WPIL Ltd. v. CCE, (supra) and Ralson (India) Ltd. v. CCE. The court accordingly, allowed the writ petition and declared that the notification dated 6.7.2016 with all its terms and conditions would apply for the period 16.6.2016 to 6.7.2016 also and granted consequential relief.
38. In the facts of the present case, import of capital goods under a valid authorisation under the EPCG Scheme was wholly exempt from payment of any additional duty under section 3 of the Customs Tariff Act. The intention of the Central Government while framing the EPCG Scheme was to permit export 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 exempted 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 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. 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 additional duty under sub- sections (7) and (9) of the Customs Tariff Act on Page 13 of 19 Uploaded by SAJ GEORGE(HC01069) on Thu Dec 11 2025 Downloaded on : Fri Dec 12 21:39:14 IST 2025 NEUTRAL CITATION C/SCA/18747/2018 JUDGMENT DATED: 21/11/2025 undefined such imports, despite the fact that the Foreign Trade Policy 2015-2020 envisages imports under the EPCG Scheme at zero customs duty. Under the circumstances, the action 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 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 exemption 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 Customs 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 notification 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 extraneous consideration and was not "in public interest", it was not possible to find fault with that notification for the reasons recorded therein. The court held that the appellants, who were in business, have to be prepared for tides in the business. The court observed that in Pournami Oil Mills, 1986 Supp. SCC 728, it was the incentive to set up new industry in the State with a view to boost the industrialisation that exemption had been granted and it was in that fact situation that the Page 14 of 19 Uploaded by SAJ GEORGE(HC01069) on Thu Dec 11 2025 Downloaded on : Fri Dec 12 21:39:14 IST 2025 NEUTRAL CITATION C/SCA/18747/2018 JUDGMENT DATED: 21/11/2025 undefined doctrine of promissory estoppel was held available to the appellant therein. Again in Bakul Oil Industries, (1987) 1 SCC 31, it was the incentive to set up industries in a conforming area that the exemption had been granted and the court held that the Government could withdraw an exemption granted by it earlier only if such withdrawal could be made without offending the rule of promissory estoppel and without depriving an industry entitled to claim exemption for the entire specified period for which exemption had been promised to it at the time of giving incentive. The court held that both these cases, therefore, cannot advance the case of the appellants and are distinguishable on facts because the exemption notification under section 25 of the Act which was issued in that case did not hold out any incentive for setting up of any industry to use PVC resins and on the other hand, had been issued in exercise of the statutory powers, in public interest and subsequently withdrawn in exercise of the same powers again in public interest. The court was of the opinion that no justifiable prejudice was caused to the appellant in the absence of any unequivocal promise by the Government not to act and review its policy even if the necessity warranted and the "public interest" so demanded. The court held that in the facts and circumstances of those cases, the appellants could not invoke the doctrine of promissory estoppel to question the withdrawal notification issued under section 25 of the said Act.
40. In the facts of the present case, as discussed hereinabove, exemption Notification No.16/2015-Cus dated 1st April, 2015 was issued in exercise of powers under section 25 of the Customs Act, for the purpose of implementing the incentive scheme for import of capital goods under the EPCG Scheme. The above decision, therefore, does not further the case of the respondents.
41. In Director General of Foreign Trade v. Kanak Exports (supra), on which reliance has been placed by the learned senior standing counsel for the respondent, the Supreme Court followed its earlier decision in the case of Kasinka Trading v. Union of India, (supra), which as discussed hereinabove does not support the case of the respondents.
42. In the light of the above discussion, the petition succeeds and is, accordingly, allowed. It is held that the amendment of Notification No.16/2015-Cus vide Serial No.1 of Notification Page 15 of 19 Uploaded by SAJ GEORGE(HC01069) on Thu Dec 11 2025 Downloaded on : Fri Dec 12 21:39:14 IST 2025 NEUTRAL CITATION C/SCA/18747/2018 JUDGMENT DATED: 21/11/2025 undefined No.79/2017 dated 13th October, 2017, would also apply to imports made during the period 1.7.2017 to 13.10.2017. Trade Notice 11/2018 dated 30.6.2017 to the extent it is stated therein that under Chapter 5 importers would need to pay IGST is hereby quashed and set aside. The impugned order-in-original dated 29.9.2018 is hereby quashed and set aside and it is held that the petitioner is entitled to refund of the amount of Rs.2,38,83,203/- paid by it towards IGST with interest at the statutory rate. Rule is made absolute accordingly, with no order as to costs."
14. The ratio laid down in the decision of Prince Spintex Pvt. Ltd. v. Union of India (supra) is also followed by Bombay High Court in case of Sanathan Textile (P.) Ltd. v. Union of India, reported in 2023 (68) G.S.T.L 246 (Bom.), wherein it is stated as under:
"8. Keeping in mind the above background and the fact that even the Government of India was conscious of the problems faced by the exporters and the fact that the exemption has continued to be extended periodically and is valid even as on date, it is 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 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. We must keep in mind, 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 Services Compensation Cess, in the corresponding amendment made in Notification No 16/2015-Cus Vide Notification No. 26/2017-Cus, dated 29th June 2017, sub-sections (7) Page 16 of 19 Uploaded by SAJ GEORGE(HC01069) on Thu Dec 11 2025 Downloaded on : Fri Dec 12 21:39:14 IST 2025 NEUTRAL CITATION C/SCA/18747/2018 JUDGMENT DATED: 21/11/2025 undefined and (9) of Section 3 were left out. Within a short time thereafter, however, Notification dated 13th October 2017, Notification No. 16/2015-Cus came to be further amended and imports under the EPCG Scheme were exempted from additional duty under sub- sections (7) and (9) of Section 3 of the Customs Tariff Act. In our view, therefore, Nobilication No. 79/2017-Cus, dated 13th October 2017 has to be read as clarificatory or curative in nature, inasmuch as, it would, otherwise, leave a whole class of importers who had imported capital goods uncovered during the period 1st July 2017 to 13th October 2017, allowing the Department to levy additional duty under sub-section (7) and sub-section (9) of the Customs Tariff Act on such imports, despite the fact that the Foreign Trade Policy 2015-2020 envisaged imports under the EPCG Scheme at zero custom duty. We find support for this view in Paragraph 38 of the judgment of Hon'ble Gujarat High Court in Prince Spintex (P) Ltd v. Union of India- 2020 (35) G.STL 261 Paragraph 38 reads as under:-
"38. In the facts of the present case, import of capital goods under a valid authorisation under the EPCG Scheme was wholy exempt from payment of any additional duty under section 3 of the Customs Tariff Act. The intention of the Central Govemment while framing the EPCG Scheme was to permit export at zero customs duty Accordingly, by Nokcation 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 win Policy were inter alia exempted from the whole of the additional duty kevtabile under sedion 3 of the Customs Tariff Act. However, when the GST regime came into force while Section 3 of the Customs Tarif Act came to be amended by inserting sub-sections (7) and (9) providing for levy orlevy of Integrated Tax and Goods and Services 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 (19) 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-sedion (1) 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 Page 17 of 19 Uploaded by SAJ GEORGE(HC01069) on Thu Dec 11 2025 Downloaded on : Fri Dec 12 21:39:14 IST 2025 NEUTRAL CITATION C/SCA/18747/2018 JUDGMENT DATED: 21/11/2025 undefined and brackets sub-section (7) and sub-section (9) were not inserted and that it was always the intention of the Central Goverment to exempt imports of orts of capital goods under the EPCG 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 additional duty under sub-sections (7) and of the Customs Tariff Act on imports under the EPCG Scheme at zero customs duty. Under the circumstances, the action of the respondents in les Tariff Act on such imports, despite the fact that the Foreign Trade Policy 2016-
2020 envisages 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. 11/20 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 cond of the conditions contained in the Foreign Trade Policy. 2015-2020 and the exemption 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 Customs Tariff Act even 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."
9. We are informed that an SLP against Prince Spintex (P) Ltd's case (supra) has been admitted, but no stay has been granted.
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12. Petitioner shall together with its application file evidence that it has reversed the entry of availment of the subject limit. The refund application to be filed physically with the concerned authorities. If, it can be filed electronically, the concemed Department shall Page 18 of 19 Uploaded by SAJ GEORGE(HC01069) on Thu Dec 11 2025 Downloaded on : Fri Dec 12 21:39:14 IST 2025 NEUTRAL CITATION C/SCA/18747/2018 JUDGMENT DATED: 21/11/2025 undefined provide the link/portal for the same
13. Petition disposed. No order as to costs.
14. We also clarify, should any amendment to the bill of entry is required, Customs Authority shall permit such amendment."
15. Resultantly, on the basis of the settled position of law in the case of Prince Spintex Pvt. Ltd. v. Union of India (supra), the present petition is allowed. The assessment made in the impugned Bill of Entry No. 3192332 dated 11.09.2017 is hereby quashed and set-aside. The petitioner may file refund application physically with the concerned authorities and the same may be processed within a period of 12 (twelve) weeks from the date of receipt of copy of this order.
The petition is disposed of accordingly. Rule is made absolute. No order as to costs (A. S. SUPEHIA, J) (PRANAV TRIVEDI,J) SAJ GEORGE Page 19 of 19 Uploaded by SAJ GEORGE(HC01069) on Thu Dec 11 2025 Downloaded on : Fri Dec 12 21:39:14 IST 2025