ALO Law Office- IDT Tax I Arbitration I Litigation
Date: 26.09.2025
CESTAT Mumbai Quashes Customs Duty Demand on Redeployed Project Imports
This Article has been written by Shri Ravi Shekhar Jha, Advocate based in New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.
The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Mumbai, recently delivered a significant judgment in a series of appeals concerning the classification and treatment of goods imported under the “Project Imports” category. This decision, pronounced on September 19, 2025, sheds light on the complexities surrounding the Customs Act, 1962, and the Project Imports Regulations, 1986, while addressing the rights and obligations of importers and customs authorities.
Background of the Case
The appeals were filed by M/s Era Infra Engineering Ltd, M/s Aravali Power Company Pvt Ltd, and individuals associated with these entities. โ The dispute revolved around the import of five piling rigs valued at โน10,98,98,857 for the Indira Gandhi Super Thermal Power Project in Jhajjar, a mega power project. โ The applicable customs duty of โน3,27,47,724 was exempted under a notification, as the goods were classified under heading 9801 of the Customs Tariff Act, 1975, which pertains to “Project Imports.” โ
After completing the project, the rigs were redeployed to another mega power project. โ Customs authorities initiated proceedings, alleging that the exemption was specific to the original project and that the transfer breached conditions outlined in a circular. โ Consequently, they demanded recovery of the exempted duty, imposed penalties, and confiscated the rigs, allowing redemption upon payment of โน2,00,00,000.
Source: CESTAT Mumbai
Handy Download:
Write to us at office@aadrikaalaw.com
Tel: +91-11-4999 2707 I +91-9999005379
Leave a Reply