2026-VIL-1203-GUJ-CU
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CUSTOMS High Court Cases

Customs - Premature Demand of IGST on Goods Imported Under EPCG Authorization, Revenue Neutrality - Section 130 of the Customs Act, 1962 - Respondent-assessee imported goods under EPCG authorization availing the benefit of Zero Duty Export Promotion Scheme, and cleared the goods at Nil IGST under Customs Notification No. 16/2015-Cus dated 01.04.2015 as amended by Notification No. 79/2017-Cus dated 13.10.2017 - Revenue alleged that the notification was violated as the export obligation was not fulfilled, and the adjudicating authority confirmed the demand of IGST along with penalty and confiscation of the goods - Tribunal held that the proceedings were premature as the export obligation could be met within six years of the authorization. The Tribunal further held, on the data placed by the assessee, that the IGST paid would be available as Input Tax Credit, making the situation revenue neutral, and set aside the demand - Revenue contended that once the proceedings were held premature, the Tribunal could not have gone into revenue neutrality, and that such observations would bind the Revenue in fresh proceedings after the expiry of the authorization period - Whether the Tribunal was justified in examining revenue neutrality after holding the proceedings premature, and whether the order calls for interference - HELD - Once the Tribunal recorded the finding that the action initiated by the Revenue was premature, it ought to have stopped at that stage and left the matter to be considered by the Revenue in accordance with law. However, when the assessee placed on record various data, the Tribunal ventured to consider the same and recorded findings on revenue neutrality which are based on such data and are subject to verification by the Revenue. In such circumstances, no interference with the order of the Tribunal is warranted - It is open to the Revenue to verify the data in the fresh verification which may be initiated and to decide the matter in accordance with law - The appeal is disposed of
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