2026-VIL-505-CESTAT-KOL-CU
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CUSTOMS CESTAT Cases

Customs - Classification of imported goods 'Gurjon Oil' and 'Patchouli Oil' under Customs Tariff - Eligibility for concessional rate of Basic Customs Duty (BCD) - Differential IGST demand - Appellant imported 'Gurjon Oil' and 'Patchouli Oil' from Indonesia and claimed exemption from payment of BCD under Notification No. 46/2011-Cus. dated 01.06.2011 as amended by Notification No. 82/2018-Cus. dated 31.12.2018. However, during audit, authorities objected to the classification and demanded differential IGST between the rate adopted by the appellant (12%) and the rate as per the Revenue (18%) - Whether the appellant is eligible for the concessional rate of BCD and whether the demand for differential IGST is legally sustainable – HELD - The classification adopted by the appellant in respect of 'Gurjon Oil' and 'Patchouli Oil' is correct, as all goods covered under Chapter Heading 3301, irrespective of the sub-heading, would be eligible for the concessional rate of BCD – The appellant has claimed the exemption under CTH 33019079 and have submitted all the documents, including the certificate of analysis, invoice, etc., showing the country of origin as “Indonesia”. The Customs had cleared the goods only after being satisfied with the classification adopted by the appellant and the documentary evidence placed by them towards the country of origin - The demand of BCD and Surcharge on Welfare Services (SWS) are set aside as the Customs authorities had cleared the goods after being satisfied with the classification and documentary evidence provided by the appellant – The impugned order is set aside and the appeal is allowedrnIssue 2: Differential IGST demand - The appellant had paid IGST at 12% under a bonafide belief and had volunteered to pay the differential amount at 18%, with a request to allow filing of a Supplementary Bill of Entry to avail input tax credit, which was not considered by the authorities. Since the taking of IGST credit is an indefeasible right of the appellant when they use the inputs and the finished goods suffers Excise Duty / GST at the time of clearance from the appellant’s factory, the Audit/GST officials should have considered the request of the appellant - When the differential duty/tax accrues as credit to the assessee, it results in a revenue neutral situation, hence the demand is not legally sustainable. Accordingly, the demand for differential IGST is set aside
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