Customs exemption for imported aircraft failed because non-scheduled passenger service required remunerative air transport use.

Condition 104 of the customs exemption notification required the imported aircraft to be used only for non-scheduled passenger or charter services. Reading that expression with the Aircraft Rules definition of air transport service, the court noted that transport by air must be for remuneration of any kind. Flights used only for officials and directors without remuneration did not satisfy that essential element, even though public availability and a published tariff were not implied by the notification. The customs duty exemption was therefore unavailable.

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Issues: Whether the imported aircraft was used only for providing non-scheduled (passenger) services so as to satisfy Condition 104 of the exemption notification and retain the customs duty exemption.

Analysis: Condition 104 required the importer to use the aircraft only for non-scheduled (passenger) or non-scheduled (charter) services. The expression "non-scheduled (passenger) services" had to be read with Rule 3(9) of the Aircraft Rules, 1937, which defines "air transport service" as transport by air for remuneration of any kind. Flights used by the company for its officials and directors without any remuneration did not answer that definition. The requirement of public availability and published tariff could not be read into the notification, but that did not assist the appellant because the essential element of remunerative air transport service was absent.

Conclusion: The appellant did not comply with Condition 104, and the customs duty exemption was not available.

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