2018 (8) TMI 1300

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... the Customs Act, 1962. 2. Briefly the facts of the present case are that the appellant is a Government owned air carrier and operates to Male from Thiruvananthapuram. For this purpose, the appellant uplifts bonded fuel as well as duty paid fuel, however, since as per the requirement of DGCA, the aircrafts are required to maintain at least 10% extra fuel to ensure safety of the passengers of the aircraft. In case of divergence of the aircraft, some fuel is also uplifted from Male and part of the fuel remains on the board of the aircraft after its return from the international run. The Customs Department demanded the duty on that remaining fuel and thereafter a show-cause notice dt. 31/07/2007 was issued and after following the due proces....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....s the actual freight is not ascertainable, a notional freight in terms of Rule 10(2) is to be added to arrive at the assessable value of ATF. We note that the aircraft requires ATF for its propulsion. As per the Civil Aviation Regulating requirements and also for safety, aircraft carries adequate amount of fuel in its flight. The consumption of fuel depends on various factors. Factually, when the aircraft completes the inward journey to reach the Indian Airport, certain quantity of fuel is left in the tanks. We are not in agreement that there should be a freight element attributable to such fuel in the tank. In other words, the aircraft did not transport the fuel as a cargo or goods for the purpose of freight. Such interpretation will be a ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ally paid" or "payable" for the goods imported. When the value of transaction could not be determined then the Rules are applied to arrive at the value. The endeavour is to have closest proximity with the actual price. Dealing with addition of loading and handling charges at 1% on notional basis as per Rule 9 of Valuation Rules, the Apex Court held that when the actual cost towards handling charges are available, notional addition is not legally tenable. It was held to be violative of Article 14 of the Constitution, In the present case, there is no freight involved with reference to left- over fuel in the tank of an operating aircraft. Hence, there is no question such freight being 'not ascertainable' and hence addition of 20% notio....