IndiGo Moves Delhi High Court Seeking Refund of Over ₹900 Crore Customs Duty on Re-import of Aircraft Parts
IndiGo has approached the Delhi High Court seeking refund of over ₹900 crore allegedly paid as customs duty on re-import of aircraft parts sent abroad for repair and maintenance. The petition raises issues under Section 20 of the Customs Act, 1962 and the scope of exemptions for re-imported goods, with broader implications for airlines and the MRO ecosystem.
New Delhi:(Interglobe Aviation Vs Deputy Commissioner Customs) InterGlobe Aviation Limited, the operator of IndiGo, has approached the Delhi High Court seeking a refund of more than ₹900 crore allegedly paid as customs duty on the re-import of aircraft parts and components.
The airline has challenged the levy of customs duty on parts that were originally imported into India, subsequently exported for repair or maintenance, and later re-imported after completion of such processes.
Background of the Dispute
IndiGo contends that the aircraft parts in question were sent abroad solely for repair, overhaul, or maintenance and were re-imported into India after completion of the work. According to the airline, these are not fresh imports of new goods, and therefore should qualify for duty exemption or concessional duty under the applicable customs framework.
Despite this, the customs authorities allegedly demanded and collected customs duty aggregating to over ₹900 crore, prompting IndiGo to seek judicial intervention for refund and related reliefs.
IndiGo’s Legal Arguments
- Levy of customs duty on re-imported aircraft parts is contrary to the Customs Act, 1962 and applicable exemption notifications.
- Re-import of goods after repair does not automatically attract full customs duty as a fresh import.
- The duty demand effectively results in double incidence as customs duty had already been paid at the time of original import.
Relevant Statutory Framework
The dispute involves interpretation of key provisions of the customs regime, including:
- Section 20 of the Customs Act, 1962 (duty treatment for re-imported goods);
- Applicable customs exemption notifications and procedural conditions for goods exported for repair and re-imported;
- Rules and compliance requirements governing aircraft maintenance, repair and overhaul (MRO).
Relevant Case Law
- Atul Commodities Pvt. Ltd. v. Commissioner of Customs (2009) 5 SCC 46 – The Supreme Court held that re-imported goods are liable to duty only in accordance with the statutory scheme and applicable exemptions, and not automatically at full rates.
- Collector of Central Excise v. Flock (India) Pvt. Ltd. (2000) 6 SCC 650 – The Court reiterated that authorities cannot retain amounts collected without authority of law and that refund issues must be examined within the statutory framework.
- SRF Ltd. v. Commissioner of Customs (2015) 318 ELT 607 (SC) – The Supreme Court explained principles relevant to duty/valuation on goods sent abroad for processing and subsequently re-imported.
Legal Significance
The case is significant for the aviation sector, as airlines routinely export aircraft parts for maintenance and re-import them after repairs. A ruling clarifying the correct duty treatment may affect compliance costs and reduce recurring disputes for airlines and MRO operators.
What Happens Next
The Delhi High Court is expected to examine whether the duty was lawfully collected and whether IndiGo is entitled to refund under the statutory and regulatory framework governing re-imports and applicable exemptions.
Disclaimer: This article is for informational purposes only and does not constitute legal advice.