Customs exemption for aircraft imports depends on DGCA approval and permitted non-scheduled services, not a published tariff.

Condition No. 104 of the customs exemption required import by an approved operator and use of the aircraft only for non-scheduled passenger or charter services. The controlling position treats non-scheduled passenger services as air transport services other than scheduled passenger services, does not exclude charter operations, and does not require a published tariff. Customs authorities cannot ignore a valid DGCA permit unless it has been cancelled. On the facts stated, the aircraft was used within the DGCA approval and the exemption condition, so no violation was established and the demand, confiscation and penalty could not be sustained.

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Issues: Whether the importer violated Condition No. 104 of the exemption notification so as to deny the benefit of exemption and sustain the demand of customs duty, confiscation and penalty.

Analysis: Condition No. 104 required import by an operator approved by the competent authority in the Ministry of Civil Aviation and an undertaking that the aircraft would be used only for non-scheduled passenger services or non-scheduled charter services. The controlling legal position had already been settled by the Larger Bench, which held that non-scheduled passenger services cover air transport services other than scheduled passenger services, that charter operations are not excluded, that a published tariff is not a mandatory requirement, and that the customs authorities cannot disregard the DGCA permit position in the absence of cancellation by the DGCA. On the facts recorded, the aircraft was used in accordance with the DGCA permit and for remunerated services.

Conclusion: No violation of Condition No. 104 was established, and the demand, confiscation and penalty could not be sustained.

Ratio Decidendi: Where an imported aircraft is used within the scope of the DGCA approval and the exemption condition, customs authorities cannot deny the exemption or enforce confiscation and duty demand merely on a narrower view of non-scheduled services or on the absence of a published tariff.

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