InterGlobe Aviation Ltd, which operates the IndiGo airline, on Friday approached the Delhi High Court seeking a refund of over ₹900 crore paid as Customs duty on aircraft engines and parts re-imported into India after overseas repairs.
The plea came up before a bench of Justices Prathiba M Singh and Shail Jain. However, Justice Jain recused herself from hearing the matter after disclosing that her son is a pilot with IndiGo. The case will now be placed before another bench, subject to orders of the Chief Justice.
In its petition, IndiGo has challenged the levy of Customs duty on re-imported aircraft engines and parts, arguing that it is unconstitutional and amounts to a double levy on the same transaction.
The airline submitted that when aircraft engines and parts are sent abroad for repairs and subsequently re-imported, it has already paid basic Customs duty at the time of re-import without dispute. It further pointed out that since repair activity constitutes a service, it has also discharged Goods and Services Tax (GST) on a reverse charge basis.
Despite this, Customs authorities allegedly insisted on levying Customs duty again by treating the same transaction as an import of goods, the airline contended.
IndiGo claimed that the issue had already been settled by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), which held that Customs duty could not be levied again on re-imports of goods sent abroad for repairs.
Although the relevant exemption notification was later amended, the tribunal ruled that the amendment would operate only prospectively and not affect past transactions, the airline said.
According to IndiGo, it paid the disputed Customs duty under protest on more than 4,000 bills of entry, amounting to over ₹900 crore. When the airline subsequently filed refund claims, the Customs authorities rejected them on the ground that IndiGo must first seek reassessment of each individual bill of entry.
Challenging this stand, the airline has sought relief from the High Court, asserting that the refusal to grant refunds is arbitrary and contrary to settled law.
The matter is expected to be taken up by a newly constituted bench once listed.
