AI Drafter 
TaxTMI 
TaxTMI 
2022 (8) TMI 720
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.... A division bench of this Tribunal, while hearing Customs Appeal No. 74 of 2010 filed by VRL Logistics Ltd., the appellant and the connected Customs Appeals bearing No's. 75 of 2010, 76 of 2010, 77 of 2010, 78 of 2010, 79 of 2010, 80 of 2010, 81 of 2010, 82 of 2010, 83 of 2010, 114 of 2010, 115 of 2010, 116 of 2010, 117 of 2010, 118 of 2010, 119 of 2010 and 120 of 2010, noticed that two contradictory views had been expressed by division benches of the Tribunal in Commissioner of Customs, New Delhi vs. Sameer Gehlot, 2011 (263) E.L.T. 129 (Tri.-Del.) and King Rotors & Air Charter P. Ltd. vs. C.C. (ACC & Import), Mumbai, 2011 (269) E.L.T. 343 (Tri.- Mumbai), for while in Sameer Gehlot the benefit of the exemption notification No. 61 of 2017 dated 03.05.2007, the exemption notification that amended the earlier exemption notification No. 21 of 2022 dated 01.03.2002 was held to be available to the importer of an aircraft that had been granted permit by the Director General of Civil Aviation, DGCA for operating non-scheduled (passenger) services, the benefit of the aforesaid exemption notification was denied in King Rotors. The division bench, accordingly referred the matter to a larg....
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....proval 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 Assistant 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 imported aircraft for the specified purpose, an amount equal to the duty payable on the said aircraft but for the exemption under this notification. Explanation. - for the purposes of this entry,- (a) 'operator' means a person, organization, or enterprise 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 'non-scheduled (....
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....ed by DGCA to operate non-scheduled air transport (passenger) services. The department believed that the said permit would not enable the operator to carry out non-scheduled (charter) services and accordingly, a show cause notice was issued. The adjudicating authority dropped the proceedings holding that the use of the aircraft by the operator was in terms of the permit that was granted by DGCA and the operator had not used the helicopter as a private aircraft. It is this order of the adjudicating authority that was challenged by the department before the Tribunal. The division bench of the Tribunal observed that it is for the civil aviation authorities to ensure that the aircraft is operated in terms of the permit issued by DGCA and the customs authorities cannot decide whether an operator has violated the permit granted by DGCA. The division bench found that since the civil aviation authority had not detected any violation by the operator and the permit was being regularly renewed, the customs authorities could not take any action on their own. The bench noticed that both the requirements of Condition No. 104 were pre-import conditions which had been fulfilled by the operator and....
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....d 2-1-2009 and the DGCA authorities have not taken any action against such use. In DGCA's clarification dated 20-7-2010, it has also been stated that as per amended CAR, a non-scheduled operator may carry passengers either as per seat basis or by way of chartering the whole aircraft. 12. The exemption notification obviously keeps private aircrafts out of its scope by implication but there is no Condition or restriction built into the exemption notification that the exempted aircraft cannot be used on payment by the group companies to which the importing company belongs. We are of the view that the adjudicating Commissioner after analyzing various legal provisions has taken a reasonable view in this regard and the same cannot be faulted especially in the absence of any restriction in the notification not to permit use of the aircraft by the importing company or its 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....
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....would fall within the former category, was also repelled. The earlier decision of the division bench of the Tribunal in Sameer Gehlot was considered to be not a binding precedent for the reason that post-importation nature of the undertaking was not appreciated by the bench while taking the view that the requirement of undertaking to be furnished by the importer was only a pre-importation condition. According to the division bench, this was a mistake in the decision and, therefore, the decision was considered to be per-incuriam. The relevant paragraphs of the decision are reproduced: "24.2 There is no room for doubt as to the scope of the permit issued to the assessee by DGCA. The permit is for operating "non-scheduled air transport services (passenger)" with the helicopter mentioned in the list appended thereto (Appendix-1), for the period specified in Appendix-2, subject to observance of the Conditions specified in Appendix-3. "Non-Scheduled Air Transport Services (Passenger)" prominently figures in the caption of each of these appendices to the permit. Appendix-1 (list of aircraft) clearly provides:- "The following aircraft can be operated under this permit for Non-sche....
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....reimburse the actual costs incurred by the assessee in sourcing and acquiring spares for maintenance of the helicopter. The necessary infrastructure for maintenance of the helicopter would also be provided by Heligo. The entire cost of insurance to cover all liabilities in respect of passengers, cargo, crew, helicopter and third party would be incurred by the assessee and reimbursed to them by Heligo. Heligo would also pay monthly remuneration to the pilots of the assessee. They would also bear the costs of maintenance of the helicopter and also the costs of fuel and comsumables required for its operation. On a perusal of the charter-hire agreement between the assessee and Heligo, we find that Heligo chartered/hired the helicopter for their exclusive use and they incurred the entire costs of operation and maintenance of the helicopter and even the cost of insurance to cover all liabilities. One significant term of the contract was that the "helicopter shall be utilized solely for the purpose of providing the services pursuant to the agreement and the contractor shall not utilize the helicopter for any other purpose without the prior consent of the company." Accordingly, the helicop....
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...., as the case may be." This part of Condition No. 104 treats non-scheduled (passenger) services and non-scheduled (charter) services as two distinct and mutually exclusive categories of services, which position is clear from the expressions "only" and "as the case may be" used in the above text. The plea of inclusiveness of "non- scheduled (passenger) services" and "non-scheduled (charter) services" is anathema to anyone who would prudently like to go by the text of clause (ii)(a) of Condition No. 104 as per the established rule of strict interpretation of Exemption Notification." (emphasis supplied) 9. The division bench of the Tribunal in Dove Airlines Pvt. Ltd. vs. Commissioner of Customs (Prev.), New Delhi, 2014 (313) E.L.T. 292 (Tri.- Del.) decided on 03.06.2011, also examined the aforesaid exemption notification. The bench, after noticing that the permit that was issued to the operator was for operating non-scheduled (passengers) services, observed as follows:- "17. There is also the fact that the Directorate General of Civil Aviation was being kept informed through periodic reports about the use to which the aircraft was being put to. The Ministry of Civil Avi....
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....ment with respective companies, as well as the vouchers or the invoices, etc., raised for the services provided, we find that the appellant-importer meets the requirement as per the definition of non-scheduled passenger service. The finding of the Revenue that the service provided was not a passenger service as the appellant did not print passenger ticket nor the flights were opened to public is erroneous. We hold that offering the service to public at large includes entering into agreement for providing regular service to a few members of the public on a regular basis over a period of time. The expression person includes the company under various tax laws. Further, company also forms part of the general public. The members of the public (company included) due to requirement of its business enters into the agreement with the service providers for providing of service over an extended period of time, may be weeks, months or years, it cannot be said that the service was not provided to public. Further, printing of ticket is not an essential element and such a requirement is not there, where the services are provided on the basis of published tariff or agreement wherein the hourly cha....
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....n-speaking order as it have neither considered the facts of the two cases and have summarily referred the matter to the Larger Bench, without even framing any questions to be decided by the Larger Bench. Further, we find that the Coordinate Bench of this Tribunal in Global Vectra (supra) by Final Order dated 29-4-2015, wherein one of us is the Member (Anil Choudhary, Member Judicial) have distinguished the ruling in the case of King Rotors & Air Charter (supra) observing that in the case of King Rotors & Air Charter the facts were that they had entered into an agreement with one Heligo Charter Pvt. Limited and under such agreement it parted with the possession of the helicopter/aircraft to Heligo Charter Pvt. Limited. The said Heligo Charter was taking care of maintenance, repair and operation, payment of salaries to the crew members, etc. etc. Further, on enquiry by Revenue the said King Rotors & Air Charter could not submit any documentary evidence of end use of the helicopter. Further, in the course of enquiry from the copies of passenger manifest, document evidencing payment of lease amount to the lessor-supplier of the helicopter, and copy of agreement with Heligo Charter, it ....
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....eriod of time". 15. It is evident that the appellant have not used the said aircraft in contravention of the permit granted by the DGCA to operate as a NSOP. Admittedly, DGCA has not cancelled the permit and admittedly same stands renewed from time to time. We further find that in the precedent order of this Tribunal in Global Vectra (supra) it has been held that issue of ticket is not an essential Condition, not required in case of charter operation. Admittedly, appellant have operated their aircraft mainly for charter operation, which is permissible under the NSOP." (emphasis supplied) 12. The aforesaid decision of the Tribunal was assailed by the department before the Supreme Court. The Civil Appeal (Commissioner vs. Reliance Transport & Travels Ltd.), 2020 (372) E.L.T. A105 (S.C.) was dismissed by the Supreme Court on 08.01.2020 and the order is reproduced below: "Delay condoned. Having heard Learned Solicitor General appearing on behalf of the appellant and gone through the records of the case, we are of the considered opinion that the appeals, being devoid of any merit, are liable to be dismissed and, are dismissed accordingly." 13. A divis....
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....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. xxxxxxxxxxx 17. xxxxxxx. In the present case we are also of the firm opinion that facts of the present case are different from the case of King Rotors & Air Charter (Supra) and that of Sameer Gehlot (Supra) because the main allegation qua the violation of undertaking was based on 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. xxxxxxxxxx 19. xxxxxxxx. The issue in the earlier cases is as to whether undertaking for using the aircraft for non-scheduled operator ser....
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....ay the said customs duty as if he has failed to pay the same at the relevant point of time to the jurisdictional customs authority from any point of imagination cannot be ruled out. They are held to vest with the jurisdiction to demand the customs duty. Since the benefit of exemption has been claimed by giving an undertaking whereupon the appellant has failed to stand with the possibility of intent of the appellant to evade said duty at the time of import of the aircraft cannot be ruled out especially when there is no evidence produced on record by the appellant. (emphasis supplied) 15. It needs to be noted that the Department had filed Civil Appeals before the Supreme Court against the decision rendered by the Tribunal on 12.11.2010 in Sameer Gehlot, the decision of the Tribunal rendered on 11.09.2019 in Airmid Aviation and the decision rendered by the Tribunal on 03.06.2011 in Dove Airlines. All these Civil Appeals were dismissed by the Supreme Court on 26.11.2021, but questions of law were left open to be adjudicated in an appropriate case. The order passed by the Supreme Court is reproduced below: "These appeals filed under Section 130-E of the Customs Act, 1962 ....
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....take vitiated the decision. This is the reason why, with great respect, we consider the decision in AASPL's case as having been rendered per incuriam." (emphasis supplied) 19. The relevant portion of the decision in East India Hotels is reproduced below: "17. In the present case we are also of the firm opinion that facts of the present case are different from the case of King Rotors & Air Charter (Supra) and that of Sameer Gehlot (Supra) because the main allegation qua the violation of undertaking was based on 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." 20. This larger bench of the Tribunal by order dated 09.05.2022, framed questions of law and the order is reproduced below: "During the course of hearing of this appeal it was pointed out by both the l....
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.... to issue air-tickets for providing non-scheduled operation passenger service to comply with the Conditions of the non-scheduled operation passenger service; (vii) Whether the "New Civil Aviation Requirement, 2010, CAR, 2010" issued on 01.06.2010 has no retrospective operation as held in King Rotors and Air Charter Pvt. Ltd. Vs. C.C. (ACC & Import), Mumbai 2011 (269) ELT 343 (T), notwithstanding paragraph 2.7 of the CAR, 2010; and (viii) Whether the decision rendered in King Rotors is inapplicable in facts of the case in view of specific findings in King Rotors that the importer therein did not provide non-scheduled operation passenger service but a third party had provided the non-scheduled operation passenger service and whether the Tribunal in King Rotors was correct in holding the decision of the Tribunal in C.C. New Delhi vs. Sameer Gehlot, 2011 (263) ELT 129 (T), is per in-curiam. 2. List the appeal for hearing on June 08, 2022. The parties may submit additional submissions in two weeks." 21. It would be useful, before adverting to the submissions advanced by the learned counsel appearing for the appellants and the intervenors, as also the learne....
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....ed 03.05.2007 inserted Condition No. 104 which requires at the stage of import, an approval from MCA to import the aircraft for non-scheduled (passenger) service and an undertaking by the importer to the customs authority that the aircraft would be used only for non-scheduled (passenger) services and that the operator would pay on demand, in the event of his failure to use the aircraft for the specified purpose, an amount equal to the duty payable on the said aircraft but for the exemption under the notification. 25. Explanation (b) to Condition No. 104 of the exemption notification defines non-scheduled (passenger) services as: "(b) Air transport services other than scheduled (passenger) air transport services as defined in Rule 3 of the Aircraft Rules, 1937." 26. The aforesaid definition refers to 'air transport services' and 'scheduled (passenger) air transport services' as defined in rule 3 of the Aircraft Rules, 1937, the Aircraft Rules. 27. "Air transport services" is defined in rule 3(9) of the Aircraft Rules as under: "Air transport service" means a service for the transport by air of persons, mails or any other thing, animate or inanimate, for an....
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....venor made the following submissions: (i) The reference to the larger bench has been rendered infructuous in view of the doctrine of merger, as held by the Supreme Court in Pernod Ricard India (P) Ltd. vs. Commr. of Cus., ICD, Tughlakabad, 2010 (256) E.L.T. 161 (S.C.) and Kunhayammed vs. State of Kerala, 2001 (129) E.L.T. 11 (S.C.) for the reason that the Civil Appeal filed by the Department against the decision of Tribunal in Reliance Transport was dismissed by the Supreme Court; (ii) The aircraft has been used by the appellants only for providing non-scheduled (passenger) service as defined in clause (b) of the Explanation contained in Condition No. 104 of the exemption notification; (iii) There is no restriction or prohibition against providing air transport service by way of charter of aircraft while providing non-scheduled (passenger) services as defined in clause (b) of the Explanation contained in Condition No. 104 of the exemption notification; (iv) The contention of the respondent that carriage, for remuneration, of personnel of companies which are group companies of the appellant, does not constitute carriage of members of 'public', apa....
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....ion notification. In any case an exemption notification has to be strictly construed in view of the judgment of the Supreme Court in Commissioner of Customs (Imports), Mumbai vs. Dilip Kumar & Company 2018 (361) E.L.T. 577 (S.C.); (iv) The contention of the appellants that an aircraft imported for non-scheduled (passenger) services can be used for non-scheduled (charter) service is not correct as non-scheduled (charter) service can be provided only if the aircraft is registered as such and is approved by the DGCA; (v) Non-publication of the tariff for non-scheduled (charter) services would be violative of Explanation (c) of Condition No. 104 of the exemption notification; (vi) The issue as to whether the use of the aircraft was as a 'private' aircraft will depend on the facts of the case and the provisions of the Aircraft Rules; (vii) The language of the undertaking prescribed in the exemption notification clearly indicates that it is a continuing future obligation and in the event of the failure to use the aircraft for the declared purpose, an obligation is placed on the importer to pay the duty. Thus, the appellants are not justified in asserti....
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..... Learned special counsel appearing for the Department, however, refuted this contention and submitted that the reference would still be maintainable. In support of this submission learned special counsel placed reliance on the decision of the larger bench of the Tribunal in Kafila Hospitality. 38. To appreciate this submission, it would be necessary to again reproduce the order passed by the Supreme Court in the Civil Appeal filed by the Department against the decision of the Tribunal in Reliance Transport and the same is as follows: "Delay Condoned. Having heard Learned Solicitor General appearing on behalf of the appellant and gone through the records of the case, we are of the considered opinion that the appeals, being devoid of any merit, are liable to be dismissed and, are dismissed accordingly." 39. A perusal of the aforesaid decision of the Supreme Court would indicate that the Civil Appeal was dismissed as being devoid of any merit. The Supreme Court did not specifically deal with the various reasons given by the Tribunal for holding that the operator had not violated the conditions stipulated in the exemption notification. 40. To support the con....
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....e Supreme Court when an appeal is dismissed by the Supreme Court. It would, therefore, be apt to refer to this decision of the Supreme Court in Nadar at length. Incidentally, the issue of admissibility of a reference before the Full Bench of the High Court was in issue in Nadar. The constitutional validity of the Madras City Tenants Protection (Amendment) Act, 1994 (Act No. 2 of 1996) was assailed in several writ petitions before the Madras High Court. When the matter came up for hearing before a division bench of the High Court, reliance was placed by the respondents on an earlier division bench decision of the Madras High Court in M. Vardaraja Pillai vs. Salem Municipal Council, 85 Law Weekly 760, wherein the constitutional validity of the Madras City Tenants Protection (Amendment) Act, 1960 (Act No. 13 of 1960) was assailed. This division bench had upheld the validity of Act No. 13 of 1960 but against this decision, appeals by special leave were filed before the Supreme Court. The Supreme Court dismissed the appeals by an order dated September 10, 1986 and it is reproduced below :- "The Constitutional validity of Act 13 of 1960 amending the Madras City Tenants' Prot....
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....preme Court then explained in detail the doctrine of merger and observed that the earlier order dated September 10, 1986 of the Supreme Court can be said to be a declaration of law only on two points, namely that in a petition involving an issue concerning the constitutional validity of any State Legislation, the State is a necessary party and in its absence the issue cannot be gone into and that a belated prayer for impleading a necessary party may be declined. The Supreme Court also observed that by no stretch of imagination can it be said that the reasoning or the law contained in the decision of the division bench of the Madras High Court in Pillai stood merged in the order of the Supreme Court in a sense so as to amount to a declaration of law under article 141 of the Constitution by the Supreme Court or that the order of the Supreme Court had affirmed the statement of law contained in the decision of the High Court. The Supreme Court, therefore, held that upon the dismissal of the appeals on September 10, 1986, the operative part of the order of the division bench stood merged in the decision of the Supreme Court, but the remaining part of the order of the division bench of t....
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....dinate forum what would merge in the order of the superior forum is the operative part of the order and not the reasoning of the subordinate forum; otherwise there would be an apparent contradiction. However, in certain cases, the reasons for decision can also be said to have merged in the order of the superior court if the superior court has, while formulating its own judgment or order, either adopted or reiterated the reasoning, or recorded an express approval of the reasoning, incorporated in the judgment or order of the subordinate forum. 11. Secondly, the doctrine of merger has a limited application. In State of U.P. v. Mohammad Nooh. AIR (1958) SC 86 the Constitution Bench by its majority speaking through S.R. Das. CJ so expressed itself. "while it is true that a decree of a court of first instance may be said to merge in the decree passed on appeal there from or even in the order passed in revision, it does so only for certain purposes, namely, for the purposes of computing the period of limitation for execution of the decree". A three-Judge Bench in State of Madras v. Madurai Mills Co. Ltd., AIR (1967) SC 681 held, "the doctrine of merger is not a doctrine of rigid....
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.... issue in the light of the rule of sub-silentio. The question posed was: can the decision of an Appellate Court be treated as a binding decision of the Appellate Court on a conclusion of law which was neither raised nor preceded by any consideration or in other words can such conclusions be considered as declaration of law? His Lordship held that the rule of sub-silentio, is an exception to the rule of precedents. "A decision passes sub-silentio, in the technical sense that has come to be attached to that phrase, when the particular point of law involved in the decision is not perceived by the court or present to its mind." A court is not bound by an earlier decision if it was rendered 'without any argument, without reference to the crucial words of the rule and without any citation of the authority'. A decision which is not express and is not founded on reasons, nor which proceeds on consideration of the issues, cannot be deemed to be a law declared, to have a binding effect as is contemplated by Article 141. His Lordship quoted the observation from B. Shama Rao v. The Union Territory of Pondicherry, [1967] 2 SCR 650 "it is trite to say that a decision is binding not becau....
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....tutional validity of any State Legislation the State is a necessary party and in its absence the issue cannot be gone into, and (ii) that a belated prayer for impleading a necessary party may be declined by this Court exercising its jurisdiction under Article 136 of the Constitution if the granting of the prayer is considered by the Court neither necessary nor proper to allow at the given distance of time. By no stretch of imagination can it be said that the reasoning or view of the law contained in the decision of the Division of the High Court in M. Varadaraja Pillai 's case had stood merged in the order of this court dated 10.9.1986 in such sense as to amount to declaration of law under Article 141 by this Court or that the order of this Court had affirmed the statement of law contained in the decision of High Court. 17. We are clearly of the opinion that in spite of the dismissal of the appeals on 10.9.1986 by this Court on the ground of non-joinder of necessary party, though the operative part of the order of the Division Bench stood merged in the decision of this Court, the remaining part of the order of Division Bench of the High Court cannot be said to have mer....
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....vires of the State legislation involved." 21. For the foregoing reasons, the appeals are allowed. The impugned judgment of the High Court is set aside. All the appeals shall stand restored before the Full Bench of the High Court and shall be heard and decided in accordance with law. (emphasis supplied) 45. The aforesaid decision of the Supreme Court in Nadar was followed by the Supreme Court in Collector of Central Excise vs. Technoweld Industries (2003) 11 SCC 798 and the relevant paragraph is reproduced below :- "5. Reliance was placed upon the authority of this Court in the case of S. Shanmugavel Nadar vs. State of T.N. It was submitted that all the civil appeals had been dismissed by non-speaking orders. It was submitted that it is open to this Court to consider whether or not the impugned decisions of the Tribunal are correct. There can be no dispute with this proposition. We have, therefore, heard the learned counsel at length." 46. In State of Kerala and another vs. Kondottyparambanmoosa and Others (2008) 8 SCC 65, the Supreme Court also examined the doctrine of merger. The decision of the Taluk Land Board was assailed in a revision before the High....
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.... on merits, the said order rejecting the same on the ground of delay cannot be said to be the order of affirmance and that being the position, we must hold that since the earlier revision petition was not decided on merits, the doctrine of merger cannot be applied to the facts and circumstances of the present case. In this connection an observation made by this Court in Chandi Prasad and Others Vs. Jagdish Prasad (2004) 8 SCC 724 needs to be reproduced which is as under:- "28. .....when an appeal is dismissed on the ground that delay in filing the same is not condoned, the doctrine of merger shall not apply." 25. In this view of the matter, we are, therefore, of the opinion that the doctrine of merger would only apply in a case when a higher forum entertains an appeal or revision and passes an order on merit and not when the appeal or revision is dismissed on the ground that delay in filing the same is not condoned. In our view, mere rejection of the revision petition on the ground of delay cannot be allowed to take away the jurisdiction of the Board, whose order forms a subject-matter of petition and Section 85(9) of the Act confers powers on the Board to reopen ....
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.... Appeal filed by the Department against the decision of the Tribunal in Reliance Transport was dismissed by the Supreme Court. Preliminary objections by revenue 51. Learned special counsel appearing for the department raised objections to question nos. (ii), (iv) and (vi) that have been framed for the reason that these three questions are case specific and entertaining them would be beyond the scope of the reference made to the Larger Bench. The submission is that these were not the issues where there was a difference of opinion in the cases referred to by the division bench. 52. As noticed above, the division bench after noticing the two contradictory views expressed by the earlier two division benches in Sameer Gehlot and King Rotors, referred the matter to the Larger Bench. When objections were raised by the parties that specific questions of law have not been framed by the division bench, the larger bench, in its order dated 09.05.2022, framed eight questions in consultation with the learned counsel for all the parties. These issues, on which objections have been raised by learned special counsel for the department, have been considered by other division benches of the....
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....transport service', it must satisfy all the following three conditions: (i) It must be undertaken between the same two or more places; (ii) It must be operated according to a published time table or the flights must constitute a recognizable systematic series; and (iii) Each flight must be open to use by members of the public. 57. If any of the aforesaid three conditions is not satisfied in respect of a passenger air transport service, the same cannot be termed as 'scheduled air transport service' and, therefore, would be a non-scheduled (passenger) service as defined in clause (b) of the Explanation to Condition No. 104 of the exemption notification. In the present case, the aforesaid conditions are not satisfied and, therefore, the air transport service rendered by the appellants would be other than scheduled (passenger) air transport service. 58. Thus, both the requirements of clause (b) of the Explanation are satisfied. It is also not in dispute that the appellants have been granted non-scheduled operator permits, which permits have been renewed from time to time without any objection from the DGCA. 59. It has now to be seen whether the appel....
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....ed by a non-scheduled (charter) air transport operator who is registered with and approved by DGCA for such purpose. Thus, an operator who is not registered with and approved by the DGCA for operating charter services cannot be permitted to operate charter services. Learned special counsel further pointed out that reliance placed on clause 9.2 of CAR 1999, by which a non-scheduled (passenger) operator can also use the aircraft for charter services, was not accepted by the division bench of the Tribunal in King Rotors for the reason that the two categories namely, non-scheduled (passenger) services and non-scheduled (charter) services are distinct services. Learned special counsel also submitted that an exemption notification has to be strictly construed as was pointed out by the Supreme Court in Dilip Kumar. 65. What needs to be noticed is that the exemption notification does not prohibit a non-scheduled (passenger) service permit holder to use the aircraft for charter operations. A conjoint reading of the definitions contained in the Aircraft Rules, as have been adopted in the definition in clause (b) of the Explanation to Condition No. 104 of the exemption notification, makes ....
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....or by chartering the entire aircraft and such a restriction is not contained either in Condition No. 104 or Aircraft Rules or the Civil Aviation Requirements. 69. It also needs to be remembered that charter is one way in which passenger services can be rendered; the only difference is that instead of individual seats, all the seats of an aircraft are hired out to one person. It is, therefore, difficult to conceive that by chartering the aircraft, non-scheduled (passenger) services would not be rendered as even in such a case an operator transport passengers. 70. This apart, a perusal of the definition of non-scheduled (passenger) services contained in the Explanation to Condition No. 104 would show that it includes within its scope all air transport services other than scheduled (passenger) air transport services. Therefore, all services which are not scheduled services are permitted non-scheduled (passenger) services. Thus, also non-scheduled (passenger) permit holders can perform air transport services either by selling individual seat or by hiring out the entire aircraft for non-scheduled operations. 71. In this view of the matter, the contention of the learned special ....
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....ph 5) Nine Seats (Paragraph 6) Eligibility requirement Requirement of Aircraft Maintenance Engineer is mandatory. (Paragraph 3.2(c)) No such requirement. (Paragraph 4.3.2) Grant of initial NOC. Fee prescribed is Rs. 50,000/- (paragraph 4.1.1) Fee prescribed is Rs. 35,000/- (Paragraph 5.1.1) Fee for renewal Rs. 30,000/-(Paragraph 8.1) Rs. 15,000/- (Paragraph 9.1.1) 74. It is apparent from the aforementioned table that the category of non-scheduled (passenger) services is a much wider category and specifically includes charter operations in which the entire aircraft is given for hire or reward by charging remuneration from the hirer. A category of charter operations was created in CAR 2000 only to provide for certain relaxation to small aircrafts and there was no intention to create a separate category. Therefore, where the regulatory requirement under the Civil Aviation Requirements itself permits the non-scheduled (passenger) operator to carry out charter operations, it would not be correct on the part of the department to contend that a non-scheduled (passenger) operator cannot carry out charter operations and that the non-scheduled (passenger) ser....
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.... term lease along with crew (wet lease) for charter operations on behalf of the client, such operations will also fall under the category of charter operations. It is only the form of the operation, which undergoes a change under such arrangements, but the substance remains the same. As regards the observations in your letter regarding two distinct categories of permits i.e. the Non-Scheduled (Passenger) and Non-Scheduled (Charter) services, it may be stated that the intention behind issuing a separate CAR for charter operations was to encourage small aircraft not exceeding the seating capacity of 9 to be used for charter operation. It may also be added that Non-Scheduled (Charter) Permit holders is expected to use his aircraft only for charter services, whereas Non- Scheduled (Passenger) Permit holder is free to use his aircraft for both charter and passenger services." (emphasis supplied) 78. A communication dated 15.12.2009 was also sent by DGCA to M/s. International Aircharter Operations India Pvt. Ltd clarifying that an operator having non-scheduled (passenger) services can also conduct charter operations in view of provisions of paragraph 9.2 of CAR 1999. Simil....
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....this CAR, within 06 months of the date of effectivity of the CAR. ****** 3.1 'Air transport service' means a service for the transport by air of persons, mails or any other thing, animate or inanimate, for any kind of remuneration whatsoever, whether such service consists of a single flight or series of flights; 3.2 'Scheduled air transport service' means an air transport service undertaken between the same two or more places and operated according to a published time table or with flights so regular or frequent that they constitute a recognisably systematic series, each flight being open to use by members of the public; 3.3 'Non-Scheduled air transport service' means an air transport service, other than a scheduled air transport service as defined in para 3.2 above, being operated for carriage of passengers, mail and goods, and includes charter operations. 3.4 "Charter operation" means an operation for hire and reward in which the departure time, departure location and arrival locations are specially negotiated and agreed with the customer or the customer's representative for entire aircraft. No ticket is sold to individual passenge....
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....s or things effected by aircraft without such remuneration if the carriage is effected by an air transport undertaking. Air transport undertaking is defined in rule 3(9A) to mean an undertaking whose business includes the carriage by air of passengers or cargo for hire or reward. It would follow from the aforesaid definitions that where the aircraft is used for carriage of persons for a remuneration it is a public transport aircraft and not a private aircraft. There is no stipulation in the said definitions that if tariff is not published, the use of air craft would be as a private aircraft. Admittedly, in the present case, the appellants have used the aircraft for carriage of persons for remuneration. Further, where the business of an undertaking includes carriage by air of persons it would be an air transport undertaking and if such an undertaking also uses the aircraft to effect carriage of persons without remuneration, it would still be public transport aircraft and not a private aircraft. Therefore, even assuming that some flights are conducted for carriage of persons without remuneration, it would be still be a public transport aircraft and not a private transport aircraft. ....
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....vices subject to Condition No. 104. 92. The alleged misuse of the aircraft, as suggested by the customs authority, has repeatedly been clarified by DGCA and the Civil Aviation Requirements relating to non-scheduled (passenger) services. It is the DGCA which is empowered to issue the Civil Aviation Requirements under rule 133A of the Aircraft Rules. The DGCA has not complained of any violation by the non-scheduled (passenger) services operator and in fact has been renewing the permits from time to time. It is only when the competent authority under the Director General of Civil Aviation Ministry finds as a fact that the permit holders have violated the conditions that it would be open to the customs authorities, in terms of the undertaking given by the permit holders, to require payment of the duty, which otherwise was exempted by the notification. 93. Learned counsel for the appellants have submitted that whenever a fiscal benefit is granted on the basis of a certificate issued by another statutory authority, it is only that statutory authority which is empowered to monitor compliance of the conditions of the certificate and to initiate action, in case of non compliance. In t....
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.... was only an estimate. It is not the respondents' case that the components were not used. The only case is that the value which had been indicated in the application was very large whereas what was actually spent was a paltry amount. To be noted that the licensing authority having taken no steps to cancel the licence. The licensing authority have not claimed that there was any misrepresentation. Once an advance licence was issued and not questioned by the licensing authority, the Customs authorities cannot refuse exemption on an allegation that there was misrepresentation. If there was any misrepresentation, it was for the licensing authority to take steps in that behalf. (emphasis supplied) 96. Learned special counsel for the department has, however, placed reliance upon the decision of a larger bench of the Tribunal in Bombay Hospital Trust. The conditional notification in issue provided that the importer of the Hospital Equipment must provide free treatment to 40% of the outdoor patients and reserve 10% beds for free treatment of patients with family income of less than Rs.500/-. Examination of compliance with the said condition was purely one of verification of the fact o....
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....s have been violated. Requirement of issuing air-tickets 100. The definitions of 'air transport service' and 'non-scheduled (passenger) service' do not stipulate any restriction or condition that such service should be rendered only on per-seat basis. Nor is there any stipulation in the said definitions for issuance of passenger tickets. The Policy Guidelines for Starting Scheduled/ Non-Scheduled Air Transport Services issued by the Ministry of Civil Aviation clearly state that non-scheduled operation means an air transport service other than scheduled air transport service and that it may be on charter basis and/or non-scheduled basis and that such operator is not permitted to publish time schedule and issue tickets to passengers. A operator of non-scheduled passenger service is, therefore, not required to issue tickets to passengers. 101. Learned special counsel for the department has, however, placed reliance upon paragraph 9.7 of CAR 1999 to contend that non-issue of passenger tickets would amount to not rendering non-scheduled (passenger) service. 102. This contention cannot not be accepted. Paragraph 9.7 of CAR 1999 provides that non-scheduled operators shall issu....
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.... payment of duty of customs on the helicopter under Notification 21/2002-Cus. (serial No. 347B) as amended by Notification 61/2007-Cus. is based inter alia on the premise that the second part [i.e., clause (ii)] of condition No. 104 is also a pre-importation condition. This part of the condition is to the effect that the importer should furnish, at the time of importation, an undertaking to the Deputy Commissioner of Customs or the Assistant Commissioner of Customs that (a) the imported aircraft shall be used only for providing non-scheduled (passenger) services or non-scheduled (charter) services, as the case may be, and (b) that he shall pay on demand, in the event of his failure to use the aircraft for the specified purpose, an amount equal to the duty payable on the aircraft but for the exemption under the Notification. To our mind, this condition relating to undertaking has two aspects viz. the factum of undertaking and the subject of undertaking. The view taken by the Bench that this condition is a pre-importation condition overlooks the fact that the subjects of undertaking are post-importation. Though the factum of undertaking takes place at the time of importation, the sub....
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....nd to follow decisions reached per incuriam." 110. In State of U.P. vs. Synthetics and Chemicals Ltd (1991) 4 SCC 139, the Supreme Court observed: "40. 'Incuria' literally means 'carelessness'. In practice per incuriam appears to mean per ignoratium. English courts have developed this principle in relaxation of the rule of stare decisis. The 'quotable in law' is avoided and ignored if it is rendered, 'in ignoratium of a statute or other binding authority'. (Young vs. Bristol Aeroplane Co. Ltd (1944) 2 All ER 293 (CA)) Same has been accepted, approved and adopted by this Court while interpreting Article 141 of the Constitution which embodies the doctrine of precedents as a matter of law." 111. The maxim 'per incuriam' is derived from the latin expression that means 'through inadvertence'. The literal meaning of the expression 'per incuriam' is 'through want of care'. In Black's Law Dictionary, 5th Edition, it has been defined as "through inadvertence". In Halsbury's Law of England Fourth Edition, Volume 26, it has been stated: "A decision is given per incuriam when the court has acted in ignorance of a previous decision of its own or of a court of co-ordinate....
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....e applied for such decisions which have been given in ignorance of some statutory provision or some authority that is binding. 115. The earlier decision may have appeared to be incorrect by a bench of co-ordinate jurisdiction on the ground that a possible aspect of the matter was not considered or more aspects should have been considered. This cannot be a reason to hold that the earlier decision by a co-ordinate bench was rendered per incuriam. The earlier judgment may seem to be not correct, but it would still have a binding effect on a bench of co-ordinate jurisdiction. 116. This is what was expressed by the Supreme Court in State of Bihar vs. Kalika Kuer Alias Kalika Singh and Ors. (2003) 5 SCC 448 and the observations are as follows: "10. Looking at the matter, in view of what has been held to mean by per incuriam, we find that such element of rendering a decision in ignorance of any provision of the statute or the judicial authority of binding nature, is not the reason indicated by the Full Bench in the impugned judgment, while saying that decision in the case of Ramkrit Singh (supra) was rendered per incuriam. On the other hand, it was observed that in the case....
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....preciation of the definition of non-scheduled (passenger) services. 120. The division bench of the Tribunal in East India Hotels held that published tariff to the public is a mandatory requirement of a non-scheduled (passenger) service and so if the tariff is not published, the use of the aircraft would be as a private aircraft. It was also held that it is the customs department that has to ensure compliance of the undertaking. These views, for the reasons stated above, are not correct views. 121. This apart, both Sameer Gehlot and King Rotors have been distinguished by the division bench in East India Hotels for the reason that both these cases were covered by the earlier CAR 1999, whereas the case before the division bench was covered by CAR 2010. This is clear from the portion of the order reproduced below: "In the present case we are also of the firm opinion that facts of the present case are different from the case of King Rotors & Air Charter (Supra) and that of Sameer Gehlot (Supra) because the main allegation qua the violation of undertaking was based on the fact that the undertaking was given for using the aircraft only for NSOP (passenger service) whereas t....