TaxTMI 
TaxTMI 
2010 (11) TMI 85
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....d seeking to deny the impugned exemption and demanding customs duty amounting to Rs. 6,74,18,712/-. The adjudicating Commissioner has passed a detailed order running into 51 pages examining various aspects of the case and has dropped the proceedings initiated under the impugned show-cause notice. In her order, she has held inter alia that M/s. AASPL did not use the impugned helicopter as a private aircraft and that the use of the said helicopter was in terms of the permit granted to them by DGCA. Consequently, she has also held that there was no post-import contravention and that the impugned exemption has been correctly availed. Accordingly, she has dropped the duty demand and the proposals to confiscate the impugned aircraft and to impose penalty on the respondents. 3. The Committee of two Chief Commissioners reviewing the impugned order have authorized filing this appeal against the impugned order of the adjudicating Commissioner. As seen from paragraphs 18.2 and 18.2.1 of the Order-in-Review dated 8-7-2009, the main ground for department's appeal is that M/s. AASPL were not granted any permit by the Civil Aviation authority for charter operations, they also did not have a....
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.... fact that in the written submissions filed by Shri Tarun Gulati, learned counsel appearing for M/s. AASPL, objection has been taken that the appeal filed by the department, on the basis of authorization given by the Committee of Chief Commissioners, for the first time raises the ground that the respondents were granted a permit for non-scheduled (passenger) services and therefore, they were not authorized to carry on charter services. The learned counsel has stated that this ground which was not taken in the show-cause notice has been raised for the first time in the appeal petition. He further states that the show-cause notice was issued on the ground that the respondents had misused the impugned helicopter for private purposes/business development and now an entirely new ground has been taken in the appeal which is not permissible. Similar objection has been raised in the submission by the learned counsel for the respondents that there was no allegation regarding the requirement of published tariff in the show-cause notice but such a ground has been taken in the appeal for the first time which is not permissible. It has also been argued on behalf of the respondents that they hav....
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....'s side. It is undisputed that it is the job of the Civil Aviation authorities to ensure that the aircrafts are operated in terms of the permit issued by that authority. The customs authorities cannot obviously monitor whether an operator has violated the permit granted to him by the Civil Aviation authority. In view of the fact that no violation has been detected against the respondents by that authority and the permit is being renewed regularly from time to time, it has to be presumed in the absence of any contrary evidence that the requirement of DGFT notification is fulfilled and the customs authorities cannot take any action unilaterally on their own in this regard. 7. However, the customs authorities are well within their powers to take any action for any violation of any of the conditions in an exemption notification. An exemption notification may have certain pre-import conditions and also post-import conditions. As regard the impugned notification, we find that there are only two pre-import conditions. The first stipulation in Condition No. 104 attached to the notification is that the importer should have been granted approval by the competent authority in the Minist....
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....ime of import. The respondents, therefore, cannot be charged with violation of a pre-import condition at a later point of time. If the Government wanted that the customs authorities should monitor the subsequent use of the aircraft, then it would have provided a suitable post-import condition in the exemption notification. Of course, the Department can proceed in terms of the undertaking executed for violation of the terms of the undertaking but that has not been done in this case. Rather a show-cause notice has been issued invoking Section 28 of the Customs Act, 1962 vide paragraphs 25 and 27 of the notice. It is settled law that Section 28 can be invoked only in the case of short-levy, non-levy and erroneous refund. Where an exemption has been allowed after the importer has fulfilled the pre-import conditions, such a case cannot be categorised either as a case of short-levy or as a case of non-levy. In the absence of any post-import condition in the exemption notification, action cannot also be taken under Section 111(o) which, in any case, has not been invoked in the show-cause notice. 11. Both sides have also taken us through the initial budget changes made in 2007 imposi....
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....s holding company on payment. If the Government finds such use not to be in line with the intended purpose of the exemption, it can always amend the notification specifically disallowing exemption for a particular kind of use such as use by Group Companies. However, as the exemption notification is worded, it would be discriminatory to object to use of the aircraft by the group companies on payment, whereas others are allowed such use. 13. As regards the requirement of published tariff for carrying out charter operations, the respondents have stated that firstly, this point was not raised in the show-cause notice but only taken up at the appeal stage and secondly, while defining non-scheduled (charter) services, 'published tariff' has been referred to as one of the characteristics of charter services and not as a condition of the exemption notification and further, they have submitted that the respondents have obtained the exemption as a non-scheduled (passenger) service operator for which they have received the necessary permit from the Civil Aviation authorities and which requires no published tariff. We are of the view that these submissions by the respondents have s....