TaxTMI 
TaxTMI 
2020 (1) TMI 766
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....pose of non scheduled air transport services, under passenger category. 2. The Department got intelligence that the said aircraft had been imported for private use by the appellant under the guise of non scheduled operator (passenger permit) herein after referred to as NSOP, with sole intention to evade the payment of customs duty. The Department alleging violation of the condition in said notification, provisions of Customs Act 1962 and that of Foreign Trade Policy issued a show cause notice upon appellant bearing no. 5192 dated 27.6.2008 proposing confiscation of the aforesaid aircraft along with the recovery of total customs duty amounting to Rs. 13.92 crores as was not paid due to said exemption. The interest under section 28 AB of the Customs Act and the penalties under section 112 read with section 140 of the Customs Act were simultaneously proposed. This proposal has been confirmed by the order in original bearing no. 20-Commr-HKC-2010 dated 27.07.2010. Being aggrieved of the said order that the present appeal has been filed before this Tribunal. 3. We have heard Mr. Narender M. Sharma & Ms. Anandita Saha, Advocates for the appellant and Mr. Rakesh Kumar, Authorised Re....
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..... 21/2002-Cus (Sl. No. 347B) as amended by notification no. 61/2007-Cus is a pre-importation condition. The Tribunal held that these conditions stands complied with by the importer in case he produces DGCA permit for non scheduled air transport services along with an undertaking to the effect that aircraft would be used only for providing said services. Learned Counsel laid emphasis on the recent decision in the case Reliance Transport & Travels Ltd. Vs. CCE New Delhi in Customs appeal no. 497/2010 as was decided on 15.10.2018. Submitting that irrespective there are two contradictory opinions of two co-ordinate benches of this Tribunal and that the matter had already been referred to Larger Bench and as on date it stands sub-judiced before Hon'ble Supreme Court of India. Still this tribunal vide the aforesaid decision in the case of M/s. Reliance Transport and Travels Ltd. has decided the appeal in favour of assessee holding that the permit of the assessee therein has been renewed from time to time by DGCA. Thus, there is no apparent objection by DGCA which is sufficient to hold that there is no violation of the impugned condition. Decision in the case of Sameer Gehlot's has also b....
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....ircraft but for the exemption under this notification. Explanation. - for the purposes of this entry. (a) Operator means a person, organization, or enterprises engaged in or offering to engage in aircraft operation; (b) Non-scheduled (passenger) services means, air transport services other than scheduled (passenger) air transport services as defined in Rule 3 of the Aircraft Rules, 1937. (c) Non-scheduled (charter) services means services provided by a nonscheduled (charter) air transport operator, for the charter on a hire of an aircraft to any person, with the published tariff, and who is registered with and approved by the Directorate General of Civil Aviation for such purposes, and who conforms to the civil aviation requirement under the provision of Rule 133A of the Aircraft Rules, 1937. Provided that such Air Charter operator is a dedicated company or partnership firm, for the above purposes. Notification No. 21/2002 stood amended by Notification No. 61/2007, which provided for exemption of additional duty of customs also." 8. Clause (i) clarifies that import of aircraft is permissible but to an operator who is granted approval by the competent authority ....
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....lish. We observed that a. Collin's Dictionary of English described public to mean: Community or people in general, New World Dictionary explains public to be people as a whole or community at large, b. As per New Shorter Oxford Dictionary public is to mean: Public collectively and the c. Concise Oxford English Dictionary explains public as: Ordinary public in general, the community at large, d. Oxford Advanced learners Dictionary has given the meaning to public as: Ordinary people in society in general. 11. Sub clause 1 of the impugned notification talks about non scheduled / passenger charter services, we need to know as to how statute defines these services. It is observed that the definition of non scheduled services is given in this notification itself in explanation (C) thereof as quoted above. The basic characteristics of NSOP appears to be as follows: a. Aircraft is used either passenger or charter air transport services. b. On hire or on published tariff. c. Aircraft is such as is registered with Directorate General of Civil Aviation (DGCA). d. To be used for such ....
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....for the flights. We draw support to this observation from clause 9.2 of passenger CAR which while dealing with non scheduled operator and their operation says "in such operations the operator shall not publish their time schedule as the operations are of non scheduled nature". Other features are common to both scheduled and non scheduled services. 13A Thus we are of the opinion from the above discussion that scheduled as well as non scheduled air transport services firm (whether for passenger or charter) are open to use by the members of public and as such stands distinguished from what can be called as private use of the aircraft. The another thing which distinguishes scheduled air transport services and non scheduled from being called as the private use of aircraft is being published tariff / hire charges / remuneration against use of the said aircraft by any group but of public. Coming to the clause 2 of the impugned notification where lies the impugned controversy we observe that this notification if read as a whole has two conditions to be complied with at the time of import of aircraft while seeking the exemption from payment of customs duty:- a. Approval by compe....
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.... the fact that the undertaking was given for using the aircraft only for NSOP (passenger service) whereas the assessee therein were found to use the same for NSOC (charter services). Both the cases are pre 2010 when there had been an amendment in this notification. With the introduction of new CAR issued by DGCA on 1.6.2010, it has been clarified that non scheduled air transport services can be the passenger as well as charter services simultaneously. 18. Prior to amendment clause (ii)(a) of the notification used to read as: "The aircraft shall be used only for providing non scheduled passenger services or non scheduled charter services, as the case may be" Whereas new CAR 2010 rules read this condition as: "The aircraft shall be used for providing non scheduled passenger services or non scheduled charter services." 19. The deletion of word "only" and "as the case may be" clarifies that prior this deletion the importer / assessee, at the time of import of aircraft had to undertake that the use of aircraft shall be either for Non Scheduled Passenger Services (NSOP) or for non scheduled charter services, (NSOC) whereas post said deletion by way of amendment in year 201....
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....not. can be appreciated only post import. 21. The sole motive of impugned notification is to get exemption from customs duty which is the domain of Customs Department, DGCA has no concern beyond taking on record the furnished undertaking. It shall be a duty of Customs Department only to ensure as to whether the importer after putting the imported aircraft to use, is continuing to be eligible to remain exempted from paying customs duty as per the terms of undertaking furnished by him. Otherwise also, impugned notification has been issued in furtherance of section 25 of Customs Duty Act and the exemption from payment is towards customs revenue. It is definitely the Customs Department's duty to ensure continuous compliance of the undertaking as was furnished by the importer at the time of importing the aircraft. As already discussed above, the usage of aircraft for NSOP/C services continuously against the published tariff the passengers who are none but the public will satisfy the continuous compliance of the said undertaking. Absence of any of these conditions will make the usage different from NSOP/C services and the said variation will definitely amount to violation of the said ....
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....l be paid by the importer on demand. The amount to be paid apparently and admittedly is the amount of customs duty which was to be paid at the time of import at the undertaking for using the aircraft for the specified purpose i.e. NSOP/C being given. Clause 2A thus clarifies that the correlative right to monitor the manner of use of the aircraft and determine whether it was being used for the said purpose as undertaken vests in Customs Department. The DGCA authority to monitor the manner of utilisation of the permit is subtly another thing which can in no way effect the jurisdiction of the Customs Department. Hon'ble Supreme Court in the case of Shashank Sea Foods Pvt. Ltd. Vs. UOI reported as 1996 (88) ELT 626 (SC) while considering analogues question in reference to another notification no. 116/1988-Cus held as follows: "We do not find in the provisions of import and export policy or the handbook of procedure issued by Ministry of Commerce, Government of India, anything that even remotely suggest that the aforesaid power of Customs authority had been taken away or abridged or that an investigation into such alleged breach could be conducted only by the licensing authorit....
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....the facts of the present case, we hold that restricted use of the imported aircraft under the impugned notification only for a particular category of the people takes the use of the said aircraft from the ambit of what is called as 'passenger services' which are otherwise meant to be open to public. No doubt the restricted group is a part of public and the person in the group are in any case the member of the public but the use of the aircraft which has been undertaken to be used for public as such if gets restricted to a particular group irrespective that restricted group is paying revenue or not it comes out of the ambit of the authorised public use of such imported aircraft. The notification condition requires not merely the payment of revenue per usage of such aircraft either for passenger or for charter services; either against the issuance of individual tickets or the price for the aircraft as a whole in case of charter, it requires that the use of the aircraft has to be kept open to public at large or to any other group of the said public not so restricted as to mean private; it shall forfeit the intention of legislature. It has been brought to the notice that Global Vectra ....