G Amphray Laboratories Vs Commissioner of Customs (NS-III) (CESTAT Mumbai)
Summary: The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Mumbai, delivered its decision in the case of G Amphray Laboratories vs Commissioner of Customs (NS-III) concerning the imposition of confiscation, penalty, and fine on Integrated Goods and Services Tax (IGST) demand arising from a breach of the “pre-import” condition attached to an exemption notification under the Advance Authorization Scheme.
The dispute arose from imports valued at ₹54.13 crore made by G Amphray Laboratories between October 2017 and December 2018 under the Advance Authorization Scheme. The scheme allowed duty-free import of inputs used in the manufacture of export goods. However, the benefit was linked to the “pre-import” condition introduced by Notification No. 79/2017 dated 13 October 2017, which required that imports be made prior to exports. This condition was later removed by Notification No. 01/2019 dated 10 January 2019. The company’s exports were executed using goods other than those imported duty-free, leading customs authorities to allege breach of the pre-import condition and issue a demand for IGST under section 3(7) of the Customs Tariff Act, 1975.
A show cause notice dated 18 December 2022 was issued under section 28 of the Customs Act, 1962, proposing recovery of differential IGST with interest under section 28AA, penalty under section 114A, and confiscation under section 111(o). The Commissioner of Customs (NS-III) confirmed the demand in an order dated 15 October 2024, appropriating IGST of ₹6.84 crore and interest of ₹4.94 crore already paid by the appellant. Additionally, a redemption fine of ₹3 crore was imposed, and penalty under section 114A was levied.
