2026 (2) TMI 744

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....the learned Commissioner(Appeals). Narrating the facts of M/s. Interglobe Aviation Ltd. would suffice the purpose to decide all these appeals. 2. M/s. Interglobe Aviation Ltd. (IGA, for short) is a scheduled airline operator engaged in the business of transportation of passengers and goods by air as well as cargo to various destinations within India. The appellant acquired aircrafts, engines and other parts on an operating lease basis from overseas parties by entering into lease agreements. During the course of operation of the airlines, defects develop and to rectify such defects, relevant parts are sent out by the appellants for repairing to Maintenance, Repair and Operations organisations located outside India (hereinafter referred to as MRO) under maintenance and repair contracts. The MRO is an organisation which specialises repair and maintenance in aircrafts and its parts and as a pre-requisite for the repair of the aircraft or such parts, it is necessary for the appellant to send the same outside India. After necessary repairs, the parts are reimported and the appellant filed Bill of Entry for reimport of the repaired aircraft parts. In the respective Bill of Entry, they ....

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....(1) of Section 12 is reproduced below : "Section 12. Dutiable goods. - (1) Except as otherwise provided in this Act, or any other law for the time being in force, duties of customs shall be levied at such rates as may be specified under the Customs Tariff Act, 1975 or any other law for the time being in force, on goods imported into, or exported from India." 22. A bare perusal of Section 12(1) of the Customs Act shows that duties of customs shall be levied at such rates as are specified under the Tariff Act or any other law for the time being in force, on goods imported into, or exported from India. The contention of the Learned Authorized Representatives of the Department is that Section 12(1) of the Customs Act leaves no manner of doubt that duties of customs are levied not only under the provisions of the Customs Act and the Tariff Act but also under 'any other law for the time being in force'. Thus, the integrated tax leviable on imported goods by the Integrated Tax Act would also be a duty of customs and, therefore, the appellant was correctly denied exemption from integrated tax leviable under Section 3(7) of the Tariff Act. 23. It is not possible t....

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.... inter-State supplies of goods or services or both on the value as determined under Section 15 of the Central Goods and Services Tax Act and at such rates, not exceeding 40 per cent as may be notified by the Government. The proviso stipulates that the integrated tax on goods imported into India shall be levied and collected in accordance with the provisions of Section 3 of the Tariff Act on the value as determined under the Tariff Act at the point when duties of customs are levied on the said goods under Section 12 of the Customs Act. Section 5 of the Integrated Tax Act is reproduced below :- "Section 5. Levy and collection. - (1) Subject to the provisions of sub-section (2), there shall be levied a tax called the integrated goods and services tax on all inter-State supplies of goods or services or both, except on the supply of alcoholic liquor for human consumption, on the value determined under section 15 of the Central Goods and Services Tax Act and at such rates, not exceeding forty per cent., as may be notified by the Government on the recommendations of the Council and collected in such manner as may be prescribed and shall be paid by the taxable person : Pr....

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....ion 12 of the Customs Act, and therefore, cannot be called as duty of customs; and (3) Section 3(7) of the Tariff Act only provides the manner of collection of the integrated tax by the customs authorities in case of import of goods. 33. It is in the light of the aforesaid discussion that the meaning assigned to duty of customs in the Exemption Notification has to be understood. 34. A perusal of the main body of the Exemption Notification would indicate that it refers not only to duty of customs leviable thereon which is specified in the First Schedule to the Tariff Act, but also to integrated tax and compensation cess which are leviable thereon respectively under sub-sections (7) and (9) of Section 3 of the Tariff Act. However, column (3) of the Table accompanying the main notification for Serial No. 2 refers to only duty of customs (without mentioning 'leviable thereon which is specified in the First Schedule'), on the fair cost of repairs carried out with insurance and freight charges. 35. It is for this reason that it has been contended by the Learned Authorised Representatives of the Department that omission to mention "specified in the said....

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.... in the public interest so to do, hereby exempts the goods falling within any Chapter of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) and specified in column (2) of the Table hereto annexed (hereinafter referred to as the said table) when re-imported into India, from so much of the duty of customs leviable thereon which is specified in the said First Schedule, the additional duty leviable under section 3 of the said Customs Tariff Act and special duty of customs leviable under sub-section (1) of Section 68 of the Finance (No. 2) Act, 1996 (33 of 1996), as is in excess of the amount indicated in the corresponding entry in column (3) of the said Table. Table Sl. No. Description of goods Amount of Duty (1) (2) (3) 1. xxxx xxxx xxx xxxx xxxx xxxx 2. Goods, other than those falling under Sl. No. 1 exported for repairs abroad Duty of customs which would be leviable if the value of re-imported goods after repairs were made up of the fair cost of repairs carried out including cost of materials used in repairs (whether such costs are actually incurred or not), insurance and freight charges, both ways. 47. It would be seen th....

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....ppeals are, therefore, allowed. 6. In the later judgment, taking note of the amending Notification No.36/2021 dated 19.07.2021 and subsequent circular issued by the Board, the Tribunal observed that the said amendment cannot be considered as clarificatory nature and retrospective in its operation. It is concluded as follows:- 65. The aforesaid discussion leads to the inevitable conclusion that the Amendment Notification dated 19.07.2021 cannot be said to be retrospective in nature. Findings to the contrary recorded by the Commissioner (Appeals) in the impugned orders on the basis of the Circular dated 19.07.2021 issued by CBIC basis the minutes of the meeting of the GST Council cannot, therefore, be sustained. The orders impugned in all the 1714 appeals are, therefore, set aside and all the appeals are allowed. 7. The said judgment was also followed in a recent case viz. Air India Ltd. Vs. CC [2025(2) TMI 320 - CESTAT New Delhi. Besides, the Hon'ble Delhi High Court in the case of Interglobe Aviation Ltd. Vs. Principal Commissioner of Customs [2025(3) TMI 347 - Delhi High Court] also held that the Notification No.36/2021-Cus dated 19.07.2021 is ultra vires. It is obs....