Exemption from payment of IGST on goods re-imported after repair can’t be denied on subsequent transactions if already allowed by CESTAT: Delhi HC

Case details: Interglobe Aviation Ltd. v. Union of India - [2021] 129 taxmann.com 21 (Delhi)

Judiciary and Counsel Details

• • D.N. Patel. C.J. and Jyoti Singh, J.
  • Ms. Charanya Lakshmikumaran, B.L. Narasimhan, Yogendra Aldak and Kunal Kapoor, Advs. for the Petitioner. 
  • Chetan Sharma, Aashish Jain, Vinay Yadav, Akshay Gadeock, Amit Gupta, Sahaj Garg and Satish Kumar for the Respondent.

Facts of the Case

The petitioner was a Public Limited Company and a scheduled Airline operator engaged in the business of transportation of passengers and goods by air within and outside India. It was re-importing Aircrafts and spare parts sent outside India for repairs and maintenance and were claiming exemptions from levy of BCD, CBD and SAD under various Notifications. The concerned Authorities allowed exemptions from levy of BCD but refused to do so with respect to IGST on the ground that IGST is leviable on fair cost of repairs and cost of insurance and freight in terms of Serial No. 2 of Notification No. 45/2017-Cus. Though the Petitioner did not agree with the said stand, however, it cleared the Goods on payment of IGST, albeit under protest.

The Bills of Entry filed by the Petitioner were challenged before the Commissioner (Appeals). However, the appeals were rejected and levy of IGST was upheld. However, appeals were allowed by the Customs, Excise and Service Tax Appellate Tribunal, New Delhi (CESTAT) holding that IGST was not leviable on Goods re-imported into India. The petitioner filed writ petition and requested to direct the concerned authorities to apply the observations and the findings in the final orders of the CESTAT in respect of all consignments of the repaired Goods imported/to be imported by the Petitioner and to enable the Petitioner to clear the Goods without payment of IGST.

High Court Held

The Honorable High Court observed that the petitioner was compelled to approach the Courts and CESTAT, despite two orders of the CESTAT in its favour. If on similar facts or legal issues, decisions have already been rendered by component courts or Tribunals, they must be followed by department in subsequent matters. Moreover, the argument that for every Bill of Entry, the petitioner must prefer an appeal before the Commissioner (Appeals), if aggrieved by an assessment, is an argument that runs counter to the National Litigation Policy of the Union of India. Therefore, petition was accepted and it was held that even if officers of the department keep changing, decision making process must be consistent and in accordance with binding judgements rendered by competent Courts or Tribunals.