Case Law Details
Interglobe Aviation Limited Vs Commissioner of Customs (CESTAT Delhi)
Conclusion: Assessee was entitled to exemption from payment of integrated tax under the Exemption Notification on re-import of repaired parts/aircraft into India because in the absence of mention of integrated tax and compensation cess in column (3) under serial no. 2 of the Exemption Notification, it would mean that only the basic customs duty on the fair cost of repair charges, freight and insurance charges were payable and integrated tax and compensation cess were wholly exempted.
Held: Assessee-company was a scheduled airline operator, engaged in the business of transportation of passengers and goods by air. In order to carry out the scheduled operations in India, assessee imported aircrafts and when the engines/ auxiliary power units or other parts of the aircrafts began to develop defects, they were exported out of India for repairs and maintenance. The repaired parts/ aircrafts were thereafter re- imported into India and at the time of re-import, Bills of Entry were filed. These Bills of Entry were assessed to basic customs duty and integrated tax at the applicable rates. Commissioner, therefore, disallowed the integrated tax exemption claimed by assessee on all the 349 Bills of Entry and integrated tax was levied on the fair cost of repairs and the cost of insurance and freight charges, both ways. The dispute in all these appeals was as to whether assessee was justified in claiming exemption of integrated tax under the Exemption Notification on re-import of repaired parts/ aircrafts into India during the period from August, 2017 to March, 2019. It was held that exemption notification refers to duty of customs leviable thereon which was specified in the said First Schedule and the integrated tax, compensation cess leviable thereon respectively under sub-sections (7) and (9) of section 3 of the Tariff Act. Thus, the additional duty leviable thereon under Section 3 of the Tariff Act and special duty of customs leviable under section 68(1) of the Finance Act had been replaced by the integrated tax under section 3(7) and compensation cess under section 3(9) of the Tariff Act. It could not, therefore, be contended that “duty of customs” referred to in the condition against serial no. 2 of the Exemption Notification would include integrated tax. The inevitable conclusion was that the absence of mention of integrated tax and compensation cess in column (3) under serial no. 2 of the Exemption Notification would mean that only the basic customs duty on the fair cost of repair charges, freight and insurance charges were payable and integrated tax and compensation cess were wholly exempted. Assessee was entitled to exemption from payment of integrated tax under the Exemption Notification on re-import of repaired parts/ aircrafts into India
FULL TEXT OF THE CESTAT JUDGEMENT
1. All these 346 appeals have been filed by M/s Interglobe Aviation Limited1. The issue raised in all these appeals is about the availability of Integrated Goods and Service Tax2 exemption provided at serial no. 2 in the General Exemption Notification No. 45/2017 dated June 30, 20173, as amended by Corrigendum Notification dated July 22, 2017, to aircrafts and parts thereof that are re-imported into India after repairs.
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