Beneficial GST circulars can retrospectively regularise disputed import tax rates and make an 18% IGST demand unsustainable.

Imported parts of poultry keeping machinery falling under heading 8436 were clarified as covered by tariff item 84369100 in Serial No. 199 of Schedule II, attracting 12% IGST. The later CBIC circulars were stated to be binding on departmental officers and, because they were beneficial and clarificatory, capable of retrospective application to regularise past periods on an as is where is basis. Applying that clarification, the 18% IGST demand was not sustainable, and the related interest, redemption fine, and penalties also could not be maintained.

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Issues: Whether the imported parts of poultry keeping machinery were chargeable to IGST at 12% under the relevant entry in Notification No. 1/2017-Integrated Tax (Rate), and whether the later clarificatory circulars regularised the past period in favour of the assessee.

Analysis: The dispute turned on the proper rate applicable to parts of machinery falling under heading 8436. The later GST Council recommendation and the CBIC circular dated 15.07.2024 clarified that tariff item 84369100 was covered by Serial No. 199 of Schedule II attracting 12% IGST. The subsequent circular dated 11.10.2024 further stated that past cases were to be regularised on an as is where is basis. The clarification was held to be binding on departmental officers and, being beneficial in nature, capable of retrospective application. On that basis, the demand raised by applying 18% IGST was not sustainable.

Conclusion: The imported goods were liable to IGST at 12%, and the demand, interest, redemption fine, and penalties could not be sustained.

Final Conclusion: The adjudication order was set aside and the appeal succeeded with consequential relief.

Ratio Decidendi: A beneficial and clarificatory circular governing a disputed tax rate is binding on departmental authorities and may be applied retrospectively to regularise past periods where the clarification resolves prevailing doubt in favour of the assessee.

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