2026-VIL-803-CESTAT-BLR-CU
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CUSTOMS CESTAT Cases

Customs – Demand of IGST on import of Software in the CD, Invocation of extended period of limitation - The appellant is a PSU engaged in manufacturing of electronic products for defence purposes and imported a CD containing software claimed to be an integral part of the LRSAM system - Department invoked the extended period of limitation under section 28(4) of the Customs Act to demand IGST on the imported CD, alleging that the appellant had intentionally mis-declared the goods to evade duty – HELD - The Serial No. 21 of Notification No. 19/2019-Cus. dated 06.07.2019 provides that the specified goods when imported into India by Ministry of Defence or Defence Forces or the Defence Public Sector Units or other Public Sector Units or any other entities for Defence Forces, shall be exempt from whole of duty of customs. Merely because the appellant had retained the CD and had not supplied it to the Ministry of Defence cannot be made a ground to deny exemption from payment of duty under the Exemption Notification – Further, merely because the software was embedded in the LRSAM system initially and the appellant later imported a CD containing the same software for providing support services, it cannot be said that the appellant had deliberately mis-represented or concealed any material facts with the intention to evade payment of duty. The appellant had clearly indicated the details of the imported CD in the B/E, the Department could have sought further information if it had any doubts. The extended period of limitation is not justified in the facts and circumstances of the case, as there was no evidence to show that the appellant had any intention to evade payment of duty - The demand raised for the extended period and the imposition of penalty under section 114A of the Customs Act is set aside - The appeal is allowed
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GSTAT Appeal filed wrongly...
By CA Vivek Jalan

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