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TMI Blog2024 (10) TMI 492X X X X Extracts X X X X X X X X Extracts X X X X ..... both the cases IGST would be payable as per provision of section 5(1) of the IGST Act, 2017 on the value of goods as per the provisions of the Customs Act. As held by the Hon ble Apex Court in case of Union of India and another v. Mohit Minerals Private Limited through Director [ 2022 (5) TMI 968 - SUPREME COURT ] as well as by Bombay High Court in case of M/s. Agarwal Coal Corporation Pvt. Ltd. [ 2024 (3) TMI 1265 - BOMBAY HIGH COURT ], when the notification itself is struck down, the respondent authorities cannot insist for levy of IGST on the amount of ocean freight in case of transaction FOB basis also. The impugned order is hereby quashed and set aside - petition allowed. - HONOURABLE MR. JUSTICE BHARGAV D. KARIA And HONOURABLE MR. JUSTICE NIRAL R. MEHTA UCHIT N SHETH(7336) FOR THE PETITIONER(S) NO. 1 MS HETVI H SANCHETI(5618) FOR THE RESPONDENT(S) NO. 1,2,3,4 JUDGMENT ( PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA ) 1. Heard learned advocate Mr. Uchit N. Sheth for the petitioner and learned advocate Ms. Hetvi H. Sancheti for the respondents. 2. Having regard to the controversy involved which is in a narrow compass with the consent of learned advocate for the respective par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; H. Such further relief(s) as deemed fit in the facts and circumstances of the case may kindly be granted in the interest of justice for which act of kindness your petitioner shall forever pray. 5. Brief facts of the case are that the petitioner is a Private Limited Company and is engaged in the business of manufacturing and sale of hard Coke of Coal falling under chapter 27 of the Customs Tariff Act, 1975. The petitioner is duly registered under the Central/State Goods and Service tax act,2017 (for short the GST Act ). The Petitioner imports coking coal from outside the country for use in the course of business. Many of such imports are made on Cost Insurance and Freight ( CIF ) basis while many imports are made on Free on Board ( FOB ) basis. 6. It is the case of the petitioner that in case of CIF contracts the transportation of goods up to the port in India is arranged for by the exporter of goods and the freight is also paid by such exporter. The foreign exporter raises consolidated invoice for such purchase by the petitioner on CIF basis. In so far as FOB contracts are concerned, the freight is paid by the petitioner directly to the foreign shipping line. 7. It is the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were on FOB basis and not on CIF basis, the ratio of the judgment of Hon ble Supreme Court in the case of Mohit Minerals Pvt. Ltd. (supra) was applicable even in respect of FOB contracts, as IGST was already paid at the time of importation on full value of imports which included freight amount. 14. Thereafter, refund was sanctioned to the petitioner by the concerned authority by passing a reasoned order. However, the GST department decided to prefer an appeal against such refund sanction orders under Section 107 of the GST Act on the principal ground that the contracts in question were FOB import contracts and therefore judgment of Hon ble Supreme Court in the case of Mohit Minerals Pvt. Ltd. (supra) was not applicable. 15. It is the case of the petitioner that the first intimation regarding filing of appeal by the department was received by the petitioner on 22.7.2023 by way of email wherein personal hearing notice was also attached. The Petitioner immediately responded by email requesting for copies of the appeals and further requesting for some time for appearance. A physical letter was also submitted in this regard on 24.7.2023. Thereafter since copies of appeal were served to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as per the proviso to section 14 of the Customs Act, 1962. 21. It was therefore, submitted that the respondent authorities were not justified in again levy of IGST on FOB value of the transaction of import carried out by the petitioner. 22. Learned advocate Mr. Sheth in support of his submission also placed reliance on the decision of Bombay High Court in case of M/s. Agarwal Coal Corporation Pvt. Ltd. v. The Assist. Commissioner of State Tax (judgment dated 05.03.2024 rendered in Writ Petition No.15227 of 2023) wherein Hon ble Bombay High Court also relying upon the decision of this Court in case of Mohit Minerals Pvt. Ltd (supra) of this Court held as under : 8. Before parting, we may also note a submission being made on behalf of the respondent namely that the decision in Mohit Minerals (supra) needs to be applied only in respect of the cases which involve the contracts on CIF basis and not FOB contracts. It is submitted that in the present case the show cause notice has been issued referring to Notification No.8/2017- Integrated Tax (Rate) dated 28-6- 2017 as the contract was a FOB contract. We find that such argument is totally untenable inasmuch as the case in Mohit Minerals ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion considering the composite nature of transaction, this Court as well as Hon ble Apex Court has come to the conclusion that by way of notification therefore cannot be any levy of IGST on transaction of CIF value. It was therefore, submitted that so far as transactions which involves import of goods on FOB value, the petitioner is liable to pay IGST on the amount of Ocean Freight as admittedly, the petitioner has availed the services on payment of freight for importation of the goods. 27. Having heard the learned advocates for the respective parties and considering issue of levy of IGST on ocean freight on imports made on FOB basis it would be germane to refer to the various provisions of the IGST Act and the Customs Act which are already considered by this Court as well as Hon ble Apex Court in case of Mohit Minerals(supra) and reiterated by Hon ble Bombay High Court in case of M/s. Agarwal Coal Corporation Pvt. Ltd.(supra) as under: : The Customs Act, 1962 : 12. Dutiable goods. (1) Except as otherwise provided in this Act, or any other law for the time being in force, duties of customs shall be levied at such rates as may be specified under [the Customs Tariff Act, 1975 (51 of 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sented under section 50. (2) Notwithstanding anything contained in sub-section (1), if the Board is satisfied that it is necessary or expedient so to do, it may, by notification in the Official Gazette, fix tariff values for any class of imported goods or export goods, having regard to the trend of value of such or like goods, and where any such tariff values are fixed, the duty shall be chargeable with reference to such tariff value. Explanation.-For the purposes of this section- (a) rate of exchange means the rate of exchange- (i) determined by the Board, or (ii) ascertained in such manner as the Board may direct, for the conversion of Indian currency into foreign currency or foreign currency into Indian currency; (b) foreign currency and Indian currency have the meanings respectively assigned to them in clause (m) and clause (q) of section 2 of the Foreign Exchange Management Act, 1999 (42 of 1999). :Integrated Goods Services Tax Act, 2017 : 5. Levy and collection.- (1) Subject to the provisions of subsection (2), there shall be levied a tax called the integrated goods and services tax on all inter-State supplies of goods or services or both, except on the supply of alcoholic li ..... X X X X Extracts X X X X X X X X Extracts X X X X
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