CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL NEW DELHI.

PRINCIPAL BENCH - COURT NO.III Customs Appeal No. 50304 of 2024 With Customs Miscellaneous Application No. 50872 of 2025 [Arising out of Order-in-Original No.05 & 06/2023-24/C.J./Principal Commissioner dated 21.07.2023 passed by the Principal Commissioner of Customs, Air Cargo Complex (Import), New Delhi]

M/s. Hal Transport Aircraft Division, Appellant Chakeri, Kanpur, Uttar Pradesh-208 008.

VERSUS Principal Commissioner Of Customs Respondent Air Cargo Complex(Import), New Customs House, Near IGI Airport, New Delhi-110 037 AND Customs Appeal No. 50839 of 2024 With Customs Miscellaneous Application No. 50871 of 2025 [Arising out of Order-in-Original No.05 & 06/2023-24/C.J./Principal Commissioner dated 21.07.2023 passed by the Principal Commissioner of Customs, Air Cargo Complex (Import), New Delhi]

M/s. Hindustan Aeronautics Ltd., Appellant HAL Corporate Office No.15/1, Cubbon Road, Bengaluru, Karnataka-560.

VERSUS Principal Commissioner Of Customs Respondent Air Cargo Complex(Import), New Customs House, Near IGI Airport, New Delhi-110 037.

APPEARANCE:

Ms. Priyanka Rathi and Ms. Priyanshi Chakarborty, Advocates for the appellant.

Shri Shiv Shankar, Authorised Representative for the respondent.

CORAM:

HON’BLE MS. BINU TAMTA, MEMBER (JUDICIAL)

HON’BLE MS. HEMAMBIKA R. PRIYA, MEMBER (TECHNICAL)

FINAL ORDER NOs.50051-50052/2026 DATE OF HEARING: 22.12.2025 DATE OF DECISION:09.01.2026 BINU TAMTA:

1. The primary issue under the present proceedings is whether the importer, Hindustan Aeronautics Limited, HAL has incorrectly availed the benefit of Sr.No.545 of Notification No.50/2017-Cus dated 30.06.2017 on the import of „Fire Extinguishers and their parts‟, by claiming them as “parts of aircraft” for concessional duty rates. The Revenue‟s case is that „Fire Extinguishers‟ are not parts of aircraft under the terms of this Notification and, therefore, HAL has short –paid the duty including Integrated Goods and Service Tax (IGST). Consequently, show cause notices dated 20.06.2022 and 03.02.2023 were issued.

2. On adjudication, common Order-in-Original dated 21.07.20232 whereby the demand of differential customs duty of INR. 92,81,577 has been confirmed against the Appellant by invoking extended period of limitation under Section 28(4) of the Customs Act. 1962, Act, 1962 along with interest under Section 28AA of the Act and penalty of equivalent amount under Section 114A of the Act for the period July 2017 to March 2022 ("relevant period") on the ground that exemption under Sl. No. 545 of Notification No. 50/2017 dated 30.06.2017 is not applicable

2 No.05 & 06/2023-24/C.J./Principal Commissioner dated 21.07.2023

to the goods imported by the Appellant i.e. fire extinguishers and its parts as they are not part of aircrafts. Further, the demand to the extent of INR. 6.75,708/- has been confirmed on the ground that the Appellant have short paid Integrated Goods and Service Tax Act, 2017 ('IGST Act') for the period July 01. 2017 to November 13, 2017.Hence, the present appeals.

3. Ms. Priyanka Rathi, learned Counsel for the appellant has made elaborate submissions challenging the veracity of the impugned order.

The detailed submissions made by her are as under:-

“7. The Appellant submits that the aforesaid finding is incorrect as the imported goods are integral part of the defence aircrafts aiding to their function as these aircrafts are prone to fire situations in various military and defense operations, hence, are eligible for the benefit of the concessional rate of BCD under St. No. 545 of the Notification in 50/2017.

Fire extinguishers are installed in defense aircrafts

8. That these fire extinguishers are installed in defense aircrafts such as Su30MKI which is a fighter jet and DO-228 for safe operation of the aircrafts during defense or military operations or border patrolling That the fire extinguishers such as P. No. 30300025 and UBSH1-6-2 are placed near the engine, which forms important and integra