TaxTMI 
TaxTMI 
2026 (9) TMI 567
X X X X Extracts X X X X
X X X X Extracts X X X X
....ppellant is engaged in the manufacture and export of Basic Chromium Sulphate, Chromic Acid and Chrome Oxide Green. During the period from 13.10.2017 to 10.01.2019, the appellant imported inputs under four Advance Authorisation and claimed exemption from IGST under Notification No. 18/2015-Cus dated 01.04.2015, as amended by Notification No. 79/2017-Cus dated 13.10.2017. Notification No. 79/2017-Cus introduced, inter alia, a pre-import condition for availing exemption from IGST in respect of imports under the Advance Authorisation Scheme. The said condition continued till it's omission by Notification No. 01/2019-Cus dated 10.01.2019. 3. The Directorate of Revenue Intelligence entertained the view that in respect of certain imports made against the Advance Authorisations, exports of finished products had preceded the corresponding imports of raw materials and, therefore, the appellant had violated the pre-import condition. A Show Cause Notice dated 10.02.2021 proposed recovery of IGST amounting to Rs. 7,44,39,300/- in respect of 70 Bills of Entry. 4. The Adjudicating Authority after considering the material before him, recomputed the demand at Rs. 5,77,38,576/- and confirmed t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o recovery of duties and taxes and did not provide the substantive machinery for levy of interest, confiscation, redemption fine and penalty in relation to IGST levied under Section 3(7) of the Customs Tariff Act. Reliance is placed upon AR Sulphonates Pvt Ltd., Vs Union of India [2025 (4) TMI 578 (Bombay HC)], GTN Engineering (India) Ltd., Vs Pr. CC (Adjudication) [2026 TAXSCAN (CESTAT) 161 (Mum)], Chiripal Poly Films Ltd., Vs CC, Ahmedabad [2024 (22) Centax 245 (Tri-Ahmd)], Sakar Industries Pvt Ltd., [2024 (10) TMI 1141 - CESTAT Ahmedabad] and Suryadev Alloys and Power (P) Ltd., Vs Pr. Commissioner of Customs (Audit), Chennai [2025 (8) TMI 1356 - CESTAT, Chennai]. The Bombay High Court decision and Tribunal decisions relied upon by the appellant concern this pre-import-condition controversy. 11. Learned AR for the Revenue reiterates the impugned order, inter alia, submitted that the pre-import condition was mandatory and its validity has been conclusively upheld by the Hon'ble Supreme Court in Union of India Vs Cosmo Films Ltd., [2023 (5) Centax 286 (SC)]. Learned AR therefore submits that the appellant, having admittedly exported finished goods prior to import of correspondin....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... place on 04.12.2017. If that factual position is correct, there would be no violation of the pre-import condition qua that quantity merely because some other inconsequential materials like pellets etc., covered by the same Advance Authorisation was imported at a later date. 19. The finding that export should be treated as satisfying the pre-import requirement only when at least one consignment of every raw material in an Advance Authorisation has already been imported requires re-consideration. Such an approach may artificially deny exemption even in respect of a raw material which had admittedly been imported before its corresponding export. The violation has to be determined having regard to the actual import-export correlation and the wording of the applicable notification and adjudication. Likewise, the plea concerning clubbing of Advance Authorisation cannot be ignored. Where the competent DGFT authority has permitted clubbing and the relevant procedure provides that the clubbed authorisations shall be treated as one authorisation for the prescribed proposes, the Customs Authorities are required to take the legal effect of such clubbing into account while quantifying the l....
X X X X Extracts X X X X
X X X X Extracts X X X X
....er can appropriately be left open in view of the order of remand on quantification of IGST payable for not meeting pre-import condition. Nevertheless, while re-determining liability, the Adjudicating Authority shall specifically examine whether the ingredients necessary for invocation of the extended period were alleged in the Show Cause Notice and established on evidence. Mere breach of the pre-import condition by itself cannot automatically be equated with suppression or wilful misstatement. 26. In so far arguments put forth by Learned AR, we find that he has mainly emphasised that in terms of judgment of Hon'ble Supreme Court in the case of Cosmos Films Ltd., supra, validity of pre-import condition during the disputed period cannot be questioned and it has attained finality. We agree with this submission. However, what we cannot agree is that when the Department has issued 16/2023 post this judgment, which provides for reassessment, it is obvious that in relation to said issue Department's interpretation was not to invoke penal provisions as has been invoked and confirmed by the Adjudicating Authority. Department's circulars have a binding effect on the Department unless it i....