Foreign aircraft fuel exemption applies where treaty-based conditions are met, subject to verification of registration and service details.

Fuel supplied to foreign aircraft may qualify for exemption from central excise duty under the Foreign Aircraft (Exemption from Taxes and Duties on Fuel and Lubricants) Act, 2002 and the linked notification where the aircraft is registered in a Convention party country and operates international services to or from India. The statutory exemption prevails over other taxing provisions, so a separate Central Excise exemption was not required. However, eligibility depended on proof of the aircraft particulars and country of registration, so the matter was remanded for verification and the benefit was to be granted if the prescribed conditions were established.

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Issues: Whether fuel supplied to foreign aircraft was exempt from central excise duty under the Foreign Aircraft (Exemption from Taxes and Duties on Fuel and Lubricants) Act, 2002 and Notification No. 3720 dated 18-11-2002, and whether the matter required remand for verification of eligibility.

Analysis: Article 253 of the Constitution of India empowers Parliament to enact legislation for implementing treaties and conventions, and Section 3 of the Foreign Aircraft (Exemption from Taxes and Duties on Fuel and Lubricants) Act, 2002, read with Notification No. 3720 dated 18-11-2002, exempt fuel supplied to foreign aircraft registered in a country that is a party to the Convention of International Civil Aviation and operating international services to or from India. The exemption under that enactment prevails over other taxing provisions, so a separate exemption under the Central Excise law was not necessary. At the same time, the assessee was required to furnish particulars of the aircraft and its country of registration to establish that the supplies satisfied the notification conditions.

Conclusion: The exemption was held applicable in principle, but the matter was remanded for verification of the aircraft details and the assessee was directed to be given the exemption if the prescribed eligibility conditions were proved.

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