2026-VIL-1772-CESTAT-MUM-CU
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CUSTOMS CESTAT Cases

Customs - Computation of IGST on Imported Goods under Section 3(7) and 3(8) of Customs Tariff Act, 1975 where Basic Customs Duty is Exempted under Notification No. 19/2015-Customs for Imports against DFIA - Appellant imported polyester viscose fabrics against a valid DFIA claiming exemption from basic customs duty, and the customs system captured basic customs duty at the tariff rate for computing IGST although the duty claimed was zero - Appellant paid the IGST as computed since the system did not permit amendment and appealed against the assessed Bills of Entry, and Commissioner (Appeals) rejected the appeals holding that duty of customs leviable under Section 12 is to be added to the transaction value and that the duty was debited in the authorisation - Whether the tariff rate of basic customs duty or the effective rate after exemption is to be added to the value for computing IGST - HELD - Section 3(8) provides that the value for IGST is the aggregate of the value determined under Section 14(1) and any duty of customs chargeable on such goods under Section 12. Though the goods attract basic customs duty at the tariff rate, the Central Government may exempt them under Section 25, and the notification exempted goods imported against a DFIA. The Appellant had complied with the Foreign Trade Policy and the notification, so the exemption claimed is in consonance with the statutory provisions. The DFIA captured only the value and quantity of the goods, debit of duty in the authorisation is not a condition precedent, and the Bills of Entry show the duty debit as zero. The duty of customs chargeable being zero, the rate of duty claimed alone should be considered for computing IGST and the tariff rate cannot be added - The computation of IGST by adding the tariff rate of basic customs duty is not sustainable - The impugned order is set aside and the appeals are allowed
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