INTERGLOBE AVIATION LIMITED VERSUS UNION OF INDIA & ANR. [2021 (8) TMI 36 - DELHI HIGH COURT]

The assessee was a scheduled airline operator engaged in the business of transportation of passengers and goods by air within and outside India. It was re-importing the aircraft and spare parts sent outside India for repairs and maintenance. It claimed exemption under Notification No. 45/2017 –Customs dated June 30, 2017 (“the Exemption Notification”) from the payment of IGST on goods reimported by it in India after repair. The Customs authorities refused the same on the ground that IGST was leviable on the fair cost of repairs and cost of insurance and freight.

The Hon’ble CESTAT Principal Bench, New Delhi on analysis of the Exemption Notification, interpreted that, intention of the legislation was only to impose BCD on the fair cost of repair charges, freight and insurance charges on such imports of goods after repair. Held that, IGST and Compensation Cess on such goods would be wholly exempt.

Subsequently, the assessee was still being compelled to clear goods on payment of IGST resulting in financial losses. Thus, this petition was before the Hon’ble Delhi High Court.

The Hon’ble Delhi High Court observed that in the absence of specific mention of IGST and Compensation Cess in the Exemption Notification, only the BCD on the fair cost of repair charges, freight and insurance charges would be payable. The IGST and Compensation Cess would be wholly exempted. Therefore, the assessee could not be denied such exemption on reimport of repaired air-crafts and spare parts.

However, an appeal has been preferred by the Revenue Department before the Hon’ble Supreme Court against the said Order. The final order of the Hon’ble Supreme Court is awaited.

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