Indirect Tax Amicus, October 2026

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Articles

Judicial clarity on interest deferment under MOOWR: A review of Rajasthan HC decision in Commissioner v. Acme Aklera Power Technology

ByRatan Jain and Shambhavi Mishra

The article examines the Rajasthan High Court’s recent decision on interest demands for unused goods imported under MOOWR and cleared ‘as such’. It explains that Section 61(2) of the Customs Act, 1962 applies only to goods under Section 61(1)(c), not qualifying manufacturing goods under clauses (a) and (b). The Court held that subsequent non-use does not negate genuine manufacturing intent at import, and administrative circulars cannot override the statute. The authors hence believe that relief depends on establishing that original intent. According to them, businesses should therefore assess each clearance individually, retain supporting internal records, and document why goods remain unused to strengthen their defence against potential customs disputes.

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Customs, DGFT and Section 28AAA: A clarification that creates confusion

By Shobhana Krishnan and Rohan Muralidharan

The second article in this issue of Indirect Tax Amicus discusses recent CBIC Instruction No. 17/2026-Cus., which permits Customs adjudication under Section 28AAA in certain circumstances without prior DGFT invalidation of licences or scrips. The authors argue that this departs from the established framework requiring DGFT to determine instrument validity before Customs adjudicates recovery. Drawing on the SC decision in Titan Medical Systems and other precedents, they warn of overlapping jurisdiction, inconsistent findings and erosion of DGFT’s independence. According to them, these concerns are particularly acute for service incentive schemes, where eligibility involves specialised FTP interpretation. The article advocates coordinated proceedings: Customs should submit evidence to DGFT for independent determination, followed by consequential recovery where warranted.

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Goods and Services Tax (GST)

Notifications and Circulars

• 57th GST Council Meeting’s recommendations implemented – Circulars and notifications issued

Ratio decidendi

• Input Tax Credit availability to bona fide purchaser when supplier defaults – Section 16(2)(c) is constitutionally valid but mechanical denial of ITC is wrong – Punjab & Haryana High Court

• Appeal to Appellate Tribunal – Further pre-deposit not required if amount deposited before Appellate Authority exceeds the cumulative pre-deposit computed on demand balance before Tribunal – GSTAT Chennai

• Compensation Cess on SUVs supplied before 26 July 2023 – Ground clearance to be measured in ‘laden’ condition – GSTAT Bengaluru

• Interest paid under Rule 96A for non-realisation of export proceeds to be refunded along with tax, when proceeds realised later – Para 4.6 of CBIC Circular No. 197/09/2023-GST quashed – Punjab & Haryana High Court

• Blocked ITC – Functionality test, as framed in Safari Retreats, is not available to a resort building – GSTAT Bengaluru

• ITC on acquisition of leasehold rights of industrial plot is not deniable under Section 17(5)(d) [blocked credit] – Gujarat High Court

• Refund – Limitation – Date of uploading of summary, and not date of communication of order, when can be taken as relevant date for limitation – Gujarat High Court

• Jurisdiction of officer – Assignment of proper officer by Circular No. 254/11/2025-GST after the Order-in-Original not invalidates the latter – Telangana High Court

• Penalty under Section 122(1A) can be imposed on ‘any person’ and not only taxable person – Delhi High Court

• Penalty under Section 122(1A) can be imposed only on transactions/acts occurring from 1 January 2021 – Delhi High Court

• Appeal to GSTAT – Refund of IGST is not covered within jurisdiction of Single Bench – GSTAT Chennai

• Appeal to GSTAT – Jurisdiction of Single Bench – Monetary limit is to be reckoned cumulatively for bunched appeals – GSTAT Chennai

• Refund of ITC on exports is not deniable where though invoices were issued in relevant period, but goods were exported later – GSTAT Chandigarh

• Refund of IGST, when levy held unconstitutional, is available even when credit taken of such tax and further utilised – No unjust enrichment as CGST and SGST credit available – GSTAT Surat

• Demand – Extended period is not invocable in case of retrospective application of liability – Gujarat High Court

Customs and FTP

Notifications and Circulars

• India-New Zealand FTA effective from 20 October 2026 – Customs notifications issued

• Raw cotton – BCD and AIDC exemption extended till 31 December 2026

• Raw sugar – BCD exemption extended till 31 December 2026

• Battery Energy Storage Systems are eligible for reduced BCD, as not covered as Power Banks

Ratio decidendi

• SEZ supplies of laptops, etc., to individual customers in DTA are not covered under TI 9804 90 00 as ‘dutiable goods intended for personal use’ – Supreme Court

• Opting for EPCG scheme on exit from EOU – Condition of registration of EPCG authorisation at port is mere procedural – Gujarat High Court

• Interest for delayed payment – Period when confiscation proceedings were pending is to be excluded – Delhi High Court

• Import restrictions are not applicable on goods which arrive before the restrictions are published even if Bill of Entry is filed later – OM by Joint DGFT cannot override FTP – Bombay High Court

• Digital Axle Counters used in railway signalling systems classifiable under Heading 8608 and not under Heading 8530 – CESTAT Kolkata

• Thermic fluid eligible for exemption under SHIS as capital goods – CESTAT Mumbai

Central Excise, Service Tax and VAT

Ratio decidendi

• Cenvat credit available of 2% CVD paid on coal under Customs notification – Rajasthan High Court

• Refund – Applicability of Section 11B and 11BB in case of voluntary/involuntary payments – Issues referred to Larger Bench of CESTAT – CESTAT New Delhi

• No service tax on amount collected from roadside eateries under Yatri Plaza Scheme by Transport Corporation – CESTAT Prayagraj

• Road construction – Scope – Provision for footpath is covered under exemption for services related to road construction – CESTAT Kolkata