TaxTMI 
TaxTMI 
2018 (10) TMI 1422
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....rted an aircraft (Global 5000, BD-700-1ALL) valued at Rs. 1,44,43,00,081/- from M/s Investec International Limited, Ireland having registration No. VT-JSK. At the time of clearance of the said aircraft, exemption was claimed from duty under Notification No. 21/2002-Cus. as amended, under serial No. 347B, at Nil rate of duty. Appellant submitted a No Objection Certificate dated 18.06.2007 from Ministry of Civil Aviation. They have also submitted a permit No. 03/2000 dated 28.09.2000 duly endorsed on 7.12.2007 by Assistant Director Air Transport, Director General Civil Aviation, New Delhi for Non-scheduled air-transport service (passenger), NSOP for short, for the period from 28.09.2007 to 27.09.2008. 3. As per condition No. 104 of serial No. 347B of said Notification No. 21/2002-Cus read with 61/2007-Cus, the importer of aircraft under the category of Non-Scheduled Operator Permit (NSOP) passenger/ charter, has to furnish an undertaking to the Deputy Commissioner of Customs at the time of importation, that the said aircraft shall be used only for providing NSOP services, that is, non-scheduled passenger services or Non-scheduled charter services, as the case may be. It is the admit....
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....en obtained on dry lease for which the appellant pays an agreed quarterly amount. The appellant also have an agreement with RADAGPL for use of aircraft on a long term basis for which they received consideration in the form of entire cost of dry lease plus maintenance plus operational expenses plus 5% towards the service fee on such aggregate amount. The appellant charges RADAGPL Rs. 7.5 lakh per hour for domestic journey and Rs. 10 lakh for other than domestic journey. It was also stated that the appellant have not given the aircraft for use to any other person/ company other than RADAGPL. It was further stated that the said aircraft is used by RADAGPL for the use of the executives of the company of Reliance Group, alongwith their spouse and close relatives. Appellant also filed list of passenger manifest in respect of the use of the said aircraft. 6. Further, it appear to Revenue that the appellant as per CAR (Civil Aviation Rules) Rule 3 Air Transport Services 'C' part-III dated 08.10.1999, as a NSOP, is required to issue passenger tickets in accordance with the provisions of the Carriage of Air Act, 1972. These tickets shall stipulate the condition of carriage including the lia....
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....t also resorting to subterfuge under a cloak, using corporate veil. 8. It also appears that there is some mis-declaration of value at the time of import and aircraft was originally invoiced at US$42,000,000 by Bombardier Aerospace Corporation, whereas the purchase price was reflected in the bill of entry at US$35,721,720, whereas as per the insurance policy the value of aircraft is US$42 million. The aircraft was dispatched by M/s Bombardier Aerospace Corporation in a raw stage, incomplete. The entire interior work was carried out in USA. It further appeared that Jane's All the World's Aircraft 2007-2008, pages 66 - 68, the cost of Bombardier Global 5000 (BD-700-IAII) is US$ 33 million 'green'(2002), i.e. aircraft in raw stage. Thus, it appeared that the assessable value should have been US$ 42 million plus 1% landing charges, which equals to Rs. 169,04,37,000/- as per prevailing exchange rate of Rs. 39.85 per US$. It further appeared that under Section 111(d) of the Customs Act, 1962, any goods imported into India contrary to any prohibition imposed under the Customs Act or any other law, shall be liable to confiscation. Further, Section 111(o) of the Act provides that any goods....
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....d the duty have been demanded by enforcing the bond given by the appellant. 11.2 It is further stated that there is no contravention of Condition No. 104 "post import condition" at any time and the finding of the ld. Commissioner in this regard is erroneous. 11.3 It is further submitted that once the conditions are satisfied at the time of import and accepted by the ld. Commissioner, there are no "post import condition" under the said notification. The Condition No. 104 in the said Notification No. 21/02-Cus. as amended, which reads as under:- "(i) The aircraft are imported by an operator who has been granted approval and by the competent authority in the Ministry of Civil Aviation to import aircraft for providing non-scheduled (passenger) services or non-scheduled (charter) services and (ii) The importer furnishes an undertaking to the Deputy Commissioner of Customs or Asst. Commissioner of Customs, as the case may be, at the time of importation that :- (a) The said aircraft shall be used only for providing non-scheduled (passenger) services or non-scheduled (charter) services, as the case may be; and (b) He shall pay on demand, in the event of his failure to use the imp....
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....ch case is to provide the name of passengers and issue of boarding pass, which have been admittedly complied with by the appellant. 11.7 Thus, evidently entering into agreement by appellant with RADAGPL for operation of the said aircraft by extending the charter services as a NSOP, is not in contravention of the permit granted by DGCA. Moreover, the DGCA has revalidated the permit for every two years since the grant of the permit on 28.09.2000, and the same was valid all throughout. 11.8 Further, the term "transport" is defined in Rule 43 of the Aircraft Act, to all carriage of person effected by aircraft for a remuneration in any nature whatsoever, and all carriage of persons or things effected by such aircraft with such remuneration, if the carriage is effected by an air passenger undertaking. Thus, it is apparent that the said aircraft have not been used by appellant as a private aircraft. Admittedly, appellant have hired the said aircraft to other companies include RADAGPL for non-schedule operation, for remuneration. Admittedly, the agreement between the appellant and RADAGPL provides for payment of hire charges as specified or 105% of expenditure and cost incurred by the ap....
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....have misuse the exemption notification as the appellant company is the subsidiary of RADAGPL and M/s Swan Sorority Finance (P) Limited, which are companies under the management of 'Reliance Anil Dhirubhai Ambani Group'. It is further stated that the tariff for operating as a NSOP is not published and as such the duty is demanded for violation of post import condition No. (ii)(a) of the said Notification No. 21/2002-Cus. as amended. Ld. AR further states that similar issue arose in the case of VRL Logistics Ltd. vs. CC, Ahmedabad - 2015 (316) ELT 494 (Tri. Ahmd.) have been referred to Larger Bench, vide an interim order dated 22.10.2014 by the Ahmedabad Bench of this Tribunal. As such, the matter may be kept in abeyance until the receipt of the opinion of the Larger Bench. The co-ordinate Bench has taken note that in the precedent ruling of this Tribunal particularly in the case of Sameer Gehlot (supra) the Tribunal has taken a view that benefit of the said notification is available to the assessee/ importer whereas another coordinate bench in the case of King Rotors & Air Charter P. Ltd. vs. CC(ACC & Import), Mumbai - 2011 (269) ELT 343 (Tri. Mum.) has taken a diagonally opposite v....
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....her find that the contention raised by the ld. AR for Revenue that the said aircraft was mainly used by the Directors, Executives and their close relatives, friends of RADAGPL is of no consequence as the CAR requirement under Section 3 of Air Transport Series part -III Issue-II, dated 01.06.2010, which applies to the existing permit holder, clarifies in para 2.4 and 2.5 as follows: "2.4. The carriage of passengers by a non-scheduled operator's permit holder may be performed on per seat basis or by way of chartering the whole aircraft on per flight basis. There is no bar on the same aircraft being used for either purpose as per the requirement of customers from time to time. The operator is also free to operate series of flights on any sector within India by selling individual seats but will not be permitted to publish time table for such flights. Operation of revenue charter to points outside India may also be undertaken as per paragraph 9.2. 2.5 A non-scheduled operator is also allowed to operate revenue charter flights for a company within its group companies, subsidiary companies, sister concern, associated companies, own employees, including Chairman and members of the Boar....