2017 (7) TMI 751

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....03. The refund is sought on the basis that Sky Marshals who were deployed on its aircrafts are not `passengers' within the meaning of Section 41(f)(ii) of the Finance Act, 1989 ('FA') and hence no IATT is payable qua the sky marshals. 2. In view of the increasing threat perception to air passengers, crew and aircrafts, the Government of India issued Notification dated 20th September, 2001, making it mandatory for air carriers to carry Sky Marshals free of charge. The deployment of Sky Marshals was to be done by the Bureau of Civil Aviation Security ('BCAS') from time to time. Initially, this obligation was imposed only on Indian Airlines. A corresponding Notification dated 19th April, 2001 was issued under Section 42 (1) of the Finance....

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....tation. 5. The present writ petition has been filed challenging the said order dated 11th December, 2006 passed by the Commissioner of Customs (Appeals) (IATT). Petitioner's Submissions 6. Mr. S. Ganesh, learned Senior Counsel for the petitioner submits that the understanding of all airlines was that IATT was not payable qua Sky Marshal deployed on their flights and this position of the Petitioner is also reiterated by the BCAS vide letter dated 24th July, 2002. Mr. Ganesh further submits that the non-extension of the exemption, applicable to Indian Airlines, to other airlines while making it compulsory to deploy Sky Marshals, is illegal and arbitrary and that the fact that IATT was not payable is fortified by the subsequent clarificatio....

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....journey,[***] a tax (hereafter in this Chapter referred to as the inland air travel tax) at the rate of [fifteen percent], of the fare paid by such passengers for every such journey. Explanation.-When a passenger performs an inland journey at a concessional rate or without being charged any fare, the fare ordinarily payable for the journey shall, for the purposes of this section, be deemed to have been paid by such passenger. (2) In accordance with the rules made under this Chapter, the inland air travel tax shall be collected by the officers of customs appointed under the Customs Act, 1962, or the Central Excise Officers appointed under the Central Excises and Salt Act, 1944, or such officers of the Central Government or the State Gove....

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....stoms (Appeals) to hear and dispose of the Petitioner's Appeal against the Order in Original of the Assistant Commissioner dated 05.11.2004 on merits without considering the same to be barred by limitation and to grant consequential refund, as may be found due" 11. The petitioner has not challenged or sought any declaration that sky marshals do not constitute passengers under Section 41(f) of the FA. The petitioner has merely prayed for setting aside/quashing the original order of the Assistant Commissioner of Customs dated 5th November, 2004 and the order of the Commissioner of Customs (Appeals) dated 11th December, 2006. 12. In the order dated 5th November, 2004, the Assistant Commissioner of Customs has categorically held that Notific....