Win for Indigo as Supreme Court dismisses Customs appeal in ₹2.53 crore duty dispute

The Supreme Court on Friday dismissed an appeal filed by the Customs Department in a ₹2.53 crore duty dispute involving InterGlobe Aviation Ltd. (IndiGo) [Commissioner of Customs Vs Interglobe Aviation].

A Bench of Justices JB Pardiwala and Vijay Bishnoi upheld a ruling by the Customs Excise Service Tax Appellate Tribunal (CESTAT) which had held that aircraft engine stands imported by the airline are “containers” and not “trailers” under the Customs Tariff.

Thus, the Court dismissed the appeal filed by Customs Department against the CESTAT judgment of February 2025. The Court dismissed the plea on the ground of delay in filing the appeal.

The case arose from the import of aircraft engine stands along with engines between April 2018 and March 2019.

IndiGo had classified the stands under Customs Tariff Item (CTI) 8609 00 00, which covers containers specially designed for carriage by one or more modes of transport.

However, the Customs Department took the view that the stands functioned like trailers used to move aircraft engines, and therefore should be classified under CTI 8716 39 00, which covers trailers and semi-trailers.

Based on this interpretation, the department issued a show cause notice alleging short payment of duty and demanded ₹2.53 crore in differential customs duty, along with interest and penalty.

The Principal Commissioner of Customs (Import), New Delhi confirmed the demand by an order dated January 30, 2020.

IndiGo challenged the order before the CESTAT in New Delhi.

In February 2025, a Bench of Justice Dilip Gupta (President) and Technical Member PV Subba Rao of CESTAt allowed the airline’s appeal.

The tribunal held that the essential character of the aircraft engine stand is derived from the cradle or holder that secures the engine rather than from the caster wheels attached to the stand.

It observed that the stands are specifically designed to secure and protect aircraft engines during transportation and repair, while the actual movement of the engines is carried out by other transport modes such as trucks, aircraft or vessels.

Since the stands function as specialised receptacles designed for transportation across multiple modes, the tribunal concluded that they fall within CTI 8609, which covers containers.

Therefore, the tribunal held that the department had incorrectly classified the goods as trailers.

Hence, it set aside the Commissioner’s order.

The Customs Department challenged the tribunal’s ruling before the Supreme Court.

The apex court dismissed the appeal, thereby affirming the tribunal’s finding that aircraft engine stands are containers under the Customs Tariff.

Customs Department was represented by advocate Chandrasekara Bharati Venkataraman.

Indigo was represented by advocate V Lakshmikumaran.