Case tittle | Interglobe Aviation Ltd. VS Union of India |
Court | Delhi High Court |
Honourable Judge | Justice Jyoti Singh |
Citation | 2021 (06) GSTPanacea 181 HC Delhi W.P.(C) NO. 5617 OF 2021 |
Judgment Date | 01-June-2021 |
(1) This petition seeks several reliefs from the court: a) Issuance of a writ of mandamus or any appropriate order directing the Respondents to implement Final Order No. 51226-51571 / 2020 dated 02.11.2020 & Final Order No.50608 – 51022 / 2021 dated 15.01.2021 passed by the Hon’ble CESTAT, New Delhi regarding all consignments of repaired goods imported or to be imported by the Petitioner; b) Issuance of a writ of mandamus or any appropriate order directing Respondent No. 2 to take necessary actions enabling the Petitioner to clear imported or to be imported repaired goods into India without payment of Integrated Goods and Services Tax (IGST), extending the benefits of exemption under Notification No. 45/2017-Cus. dated 30.06.2017; c) Granting further orders and reliefs as necessary based on the circumstances of the case.
(2) The Petitioner, a Public Limited Company and scheduled Airline operator, is involved in the transportation of passengers and goods by air domestically and internationally. Before the Goods and Services Tax (GST) regime, the Petitioner routinely re-imported aircraft and spare parts sent abroad for repairs and maintenance. During this period, the Petitioner availed exemptions from Basic Customs Duty (BCD), Countervailing Duty (CBD), and Special Additional Duty (SAD) under various Notifications. However, with the implementation of GST on July 1, 2017, Integrated Goods and Services
The petitioner, a Public Limited Company and scheduled Airline operator, seeks relief through a writ petition. They request the implementation of Final Orders issued by the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), New Delhi. These orders, dated 02.11.2020 and 15.01.2021, pertain to the exemption from Integrated Goods and Services Tax (IGST) on repaired goods imported or to be imported by the petitioner. Specifically, they seek:
1. Implementation of CESTAT Orders: Directing the respondents to implement CESTAT’s orders exempting IGST on all consignments of repaired goods.
2. Clearance of Repaired Goods: Directing necessary actions to allow the petitioner to clear repaired goods without IGST payment, under Notification No. 45/2017-Cus.
3. Further Relief: Seeking any additional orders or reliefs deemed necessary.
Before the Goods and Services Tax (GST) regime, the petitioner imported aircraft and spare parts for repair and maintenance, benefiting from various customs duty exemptions. With GST implementation on July 1, 2017, IGST became applicable on imports, regulated by Notifications like No. 50/2017-Cus. and No. 45/2017-Cus., which exempted certain goods, including re-imported goods, from customs duties and IGST.
The petitioner claims that despite these notifications, authorities imposed IGST on the fair cost of repairs, insurance, and freight for re-imported goods under Serial No. 2 of Notification No. 45/2017-Cus. Disagreeing with this interpretation, the petitioner cleared goods under protest after challenges to their Bills of Entry were rejected by the Commissioner (Appeals).
CESTAT, however, ruled in favor of the petitioner in two phases: first, on November 2, 2020, for 346 Bills of Entry, and subsequently on January 15, 2021, for 415 Bills of Entry. In both instances, CESTAT held that IGST was not leviable on re-imported goods, overturning the Commissioner (Appeals)’s decisions.
Thus, the petitioner seeks judicial intervention to enforce these favorable CESTAT orders and obtain relief from IGST payments on re-imported goods, aligning with Notification No. 45/2017-Cus.
assigned for assessment of Bills of Entry filed for the petitioner’s imported repaired goods. Despite favorable decisions from the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) in November 2020 and January 2021, which ruled that Integrated Goods and Services Tax (IGST) should not apply to these imports, the petitioner continues to face challenges. The petitioner, a public limited company and airline operator, historically imported aircraft and spare parts for repair and maintenance, benefiting from customs duty exemptions under various pre-GST notifications.
With the introduction of GST in July 2017, exemptions were reshaped, and while the petitioner successfully avoided basic customs duties (BCD), Central Excise Duty (CED), and Special Additional Duty (SAD), issues arose regarding IGST. Notifications No. 50/2017-Cus. and No. 45/2017-Cus. were issued to clarify exemptions, with the latter specifically exempting certain goods, including re-imported items, from BCD, IGST, and Compensation Cess.
The crux of the petitioner’s grievance lies in the inconsistent application of IGST exemptions by customs authorities. Despite CESTAT’s rulings in favor of the petitioner, confirming IGST non-applicability on re-imported goods, subsequent actions by customs officials have not aligned with these decisions. This discrepancy has led to financial losses for the petitioner, who has been forced to clear goods under protest, paying IGST.
The petitioner seeks relief through a mandamus or appropriate writ, directing the respondents to implement CESTAT’s orders uniformly across all consignments of repaired goods. They argue that such implementation would enable them to clear imports without IGST payment, in accordance with Notification No. 45/2017-Cus. They further stress the obligation of lower authorities to adhere to higher appellate decisions, urging compliance to avoid further financial and administrative strain on the petitioner’s operations.
1. The petitioner seeks several reliefs through this petition, including mandamus to implement specific orders by the CESTAT regarding the exemption of IGST on imported repaired goods, and any other necessary directions.
2. The petitioner, a public limited company and scheduled airline operator, was involved in importing aircraft and spare parts for repairs before the Goods and Services Tax (GST) regime. Various exemptions applied pre-GST, but GST introduced IGST on imports. Notification No. 45/2017-Cus. exempted certain goods, including repaired goods, from BCD, IGST, and Compensation Cess upon re-import.
3. Post-GST, disputes arose over IGST exemptions on re-imported goods despite the petitioner’s claims under Notification No. 45/2017-Cus. The petitioner cleared goods under protest due to the imposition of IGST on repair costs, insurance, and freight, contrary to their understanding.
4. Appeals filed by the petitioner against IGST imposition were initially rejected by the Commissioner (Appeals) but subsequently allowed by the CESTAT in two separate orders dated 02.11.2020 and 15.01.2021 for different batches of bills of entry, ruling that IGST was not leviable on re-imported goods.
5. The petitioner now seeks the court’s direction for the respondents to apply CESTAT’s findings uniformly to all consignments of repaired goods, enabling them to clear goods without IGST payment under Notification No. 45/2017-Cus.
6. The petitioner argues that the Customs Act mandates filing Bills of Entry upon import, which are to be assessed based on relevant notifications and rules. Despite favorable CESTAT orders, the petitioner continues to face IGST demands, causing financial losses and legal battles.
7. Allegations include inconsistent application of CESTAT’s rulings by different customs officers, non-compliance with higher authority orders, and financial burden on the petitioner due to repeated legal challenges.
8. The petitioner highlights extensive financial losses, exacerbated by the COVID-19 pandemic, due to paying IGST on approximately 541 bills of entry amounting to Rs. 116 crores, despite CESTAT’s rulings that IGST exemption applies under specific conditions.
9. Despite previous CESTAT orders favoring the petitioner and interpreting Notification No. 45/2017-Cus., subsequent appeals were necessary due to continued IGST demands, all of which were eventually ruled in favor of the petitioner.
This summary outlines the petitioner’s grievances regarding the inconsistent application of IGST exemptions post-GST implementation and the financial and administrative burdens incurred as a result.
The petitioner, a Public Limited Company and scheduled Airline operator, seeks relief through this petition concerning the implementation of Customs notifications related to the importation of repaired goods under the Goods and Services Tax (GST) regime. Prior to GST, the petitioner imported aircraft and spare parts for repair, claiming exemptions from Basic Customs Duty (BCD), Countervailing Duty (CVD), and Special Additional Duty (SAD) under various notifications. With the introduction of GST on July 1, 2017, Integrated GST (IGST) became applicable on imports, including repaired goods.
The crux of the petitioner’s grievance is that while they were granted exemptions from BCD, they were compelled to pay IGST on the fair cost of repairs, insurance, and freight, despite their disagreement with this interpretation. This issue led to legal challenges, where initial appeals were unsuccessful but subsequent appeals to the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) in November 2020 and January 2021 ruled in favor of the petitioner, asserting that IGST was not leviable on these re-imported goods.
Despite these favorable tribunal rulings, the petitioner claims that the authorities have not implemented these decisions uniformly across all consignments, forcing them to repeatedly pay IGST under protest, amounting to approximately Rs. 116 crores. They argue that such actions by the authorities disregard judicial discipline and the binding nature of CESTAT orders, causing financial losses and operational disruptions, exacerbated by the COVID-19 pandemic.
The petitioner seeks a writ of mandamus or similar directives to compel the respondents to adhere to the CESTAT rulings and exempt all future imported consignments of repaired goods from IGST, as per Notification No. 45/2017-Cus. They argue that the inconsistent application of customs exemptions by different officers violates legal principles and necessitates judicial intervention to prevent further financial harm and legal recourse.
In response, the respondents contend that each Bill of Entry must be assessed individually, and the petitioner has the recourse of statutory appeals if dissatisfied with assessments, challenging the maintainability of a direct writ petition to the court.
The court, after hearing both sides, must now consider whether to issue directions to enforce CESTAT’s rulings uniformly, thereby resolving the petitioner’s ongoing legal and financial predicaments concerning IGST on re-imported repaired goods.
Notifications and levying IGST on re-imported goods despite clear rulings from the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) in favor of the petitioner. The petitioner, a scheduled airline operator, imports and exports aircraft and parts for repairs and maintenance. Before the implementation of Goods and Services Tax (GST), they benefited from various customs duty exemptions. However, post-GST, disputes arose regarding the levy of Integrated Goods and Services Tax (IGST) on repaired goods re-imported into India.
The crux of the petition is the petitioner’s plea for mandamus or appropriate directions to enforce CESTAT’s final orders dated November 2, 2020, and January 15, 2021. These orders concluded that IGST should not be levied on the re-imported goods in question, contrary to the actions of the authorities who continued to impose IGST. Despite earlier appeals and rulings in favor of the petitioner by CESTAT, subsequent bills of entry continued to be assessed with IGST, prompting the petitioner to file over 541 bills under protest, amounting to approximately Rs. 116 Crores in payments.
The petitioner argues that such repeated assessments and payments under protest are unjustified, citing CESTAT’s binding rulings that IGST exemptions apply under Notification No. 45/2017-Cus. They allege financial losses and operational hindrances due to blocked capital, exacerbated by the COVID-19 pandemic.
The petitioner seeks relief from the court to direct the respondents to adhere to CESTAT’s orders, cease the wrongful imposition of IGST, and grant exemptions accordingly on all subsequent imports of repaired goods. They argue that the authorities’ failure to comply with CESTAT’s directives constitutes a violation of judicial discipline and causes undue hardship and financial strain on the petitioner.
In response, the respondents contend that each bill of entry must be individually assessed, and the petitioner retains the right to appeal assessment orders through statutory channels. They argue against the maintainability of a direct writ petition before the court, insisting that appellate avenues are available.
After hearing arguments from both sides, the court acknowledges the merit in the petitioner’s claims. It recognizes CESTAT’s rulings as binding and finds no justification for the continued imposition of IGST post-CESTAT’s decisions. The court emphasizes the need for authorities to respect judicial decisions and refrain from actions that contradict established legal interpretations.
Ultimately, the court is inclined to grant relief in favor of the petitioner, directing the respondents to comply with CESTAT’s orders and grant IGST exemptions on all subsequent imports of repaired goods as per Notification No. 45/2017-Cus.
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