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2022 (9) TMI 1300
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....03.05.2007, on which revolves the entire controversy, grants 'nil' rate of duty on import of aircraft for non-scheduled (passenger) services as well as non-scheduled (charter) services subject to Condition No. 104 that is required to be fulfilled by an importer of the aircraft for availing the benefit of the exemption notification. The relevant portion of the said exemption notification is reproduced below: "In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 21/2002-Customs, dated the 1st March, 2002 which was published in the Gazette of India, Extraordinary, vide number G.S.R. 118(E) of the same date, namely:- In the said notification,- (A) In the Table,- (i) xxxxxxxx (ii) after S. No. 347 and the entries relating thereto, the following S. Nos. and entries shall be inserted, namely:- S. No. Chapter or Heading No. or Sub-heading No. Descrip....
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....r the specified services, namely non-scheduled (passenger) services or non-scheduled (charter) services. The undertaking should also state that the importer shall pay on demand, the duty payable, in the event of his failure to use the imported aircraft for the specified purpose. 4. The Appellant imported the following Helicopters into India after March, 2007 by availing the benefit of the exemption notification: (a) Helicopter Type AS 350 B3, Registration No. VT-AZX, Aircraft Sr. No. 3524, Seating Capacity 05 ("Helicopter AZX") (b) Helicopter Type EC 155B1, Registration No. VT-AZU, Aircraft Sr. No. 6759, Seating Capacity 12 ("Helicopter AZU") (c) Helicopter Type EC 155B1, Registration No. VT-AZV, Aircraft Sr. No. 6761, Seating Capacity 6 ("Helicopter AZV") 5. The Commissioner has, in the order impugned, confirmed a demand of Rs.21,21,95,030/- along with a total penalty of Rs.5 crores against the appellant for violation of non-scheduled operators permit [NSOP] (passenger) issued by the Director General of Civil Aviation [DGCA ] for Helicopters AZU and AZV and has also ordered for confiscation of Helicopter AZU with an option to redeem the same on pay....
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.... view of the judgment of the Supreme Court in Shashank Sea Foods vs. Union of India [1996 (88) ELT 626]; On private use b. The allegation of 'private use' on the basis of use by group company cannot be sustained; On issuance of tickets c. Non-issuance of tickets is not a valid ground to allege that the aircraft was not used only for providing non-scheduled (passenger) air transport service; d. Non-filing of passenger manifest constitutes violation of Civil Aviation Requirements [(CARs)] and it is not a violation under the Customs Act; On charter e. When the entire aircraft has been chartered, the designations or nature of the passengers travelling is not material and hence, the allegation of the Department with reference to the operations of Gujarat State Petroleum Corporation are not sustained; f. Since the appellant had obtained non-scheduled operators permit for operating passenger services, they are not barred from undertaking charter operations; On long term contracts g. Long term contracts come within the purview of charter operations and accordingly the allegations relating to the operations by Oil & Natural G....
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....ed Commissionerate has decided to file an appeal against the order of the Larger Bench of the Tribunal, the hearing of these appeals may be adjourned. 13. It would not be appropriate to adjourn the hearing of these appeals only for the reason that a decision has been taken by the Department to file an appeal against the order of the Larger Bench. It needs to be noted that the reference was made to the Larger Bench in these very appeals and once the reference has been answered, the appeals would have to be decided in terms of the order of the Larger Bench. The appeals have, accordingly, been heard. 14. Shri Tarun Gulati, learned senior counsel assisted by Shri Kishore Kunal, Shri Manish Rastogi and Ms. Kanak Grover made the following submissions on behalf of the appellant: (i) The issues arising from the order passed by the Commissioner have already been decided by the Larger Bench of the Tribunal in the order dated August 08, 2022 in favour of the appellant; (ii) In M/s. Reliance Commercial Dealers Ltd. vs. Commissioner of Customs, (Preventive) New Customs House, Delhi [Customs Appeal No. 639 of 2010 decided on 08.09.2022], a Division Bench of the Tribunal f....
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....No. 104 of the exemption notification. These two conditions are satisfied by the importers, inasmuch as: - (a) The contention of the department that the appellants have rendered "air transport service" to their group companies by carrying personnel of their group companies is not of any relevance as there is no prohibition in the said definition against any kind of persons to be transported; (b) There is no stipulation or restriction or a condition in the definition that a tariff should be published or that such service should be rendered only on per-seat basis and not by chartering or about the category or class of persons to be transported; (ii) There is no requirement of having a published tariff and Condition 104 (c) to the exemption notification cannot be said to be violated on this ground; (iii) Aircraft imported for non-scheduled (passenger) services can be used for non-scheduled (charter) services and there is no restriction on the same. The exemption notification or the CAR do not prohibit a non-scheduled (passenger) service permit holder to use the aircraft for charter operations. This is for the reason that: (a) NSOP (passenge....
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....e Governments/ Individuals/Private & Public Sector companies on long/short term basis. While operating such service, the contract, ownership and operations are entirely with us. 3. The Aircraft Act, 1934, Sec 5 & 5A, entrusts DGCA with the authority and regulations of all operators under the NSOP granted to us. You are, therefore, requested to confirm if our utilization of helicopters, as mentioned at Para 2 above, for hire and reward is compliant of NSOP granted to us." 18. In response to the aforesaid letter sent by the appellant, the DGCA sent a reply dated August 08, 2008 mentioning therein that since the activities mentioned in paragraph 2 of the letter sent by the appellant are for lease/charter of aircraft, including its operations, and not merely a financial lease, the activities shall be within the privilege of the non-scheduled operators permit (passenger) granted to the appellant. The relevant portion of the letter is reproduced below: "Subject: Interpretation of NSOP (Passenger operation) Sir, Reference is made to your letter No.GVHL/DGCA/02/08 dated 04 August, 2008 on the above subject. The Non-Scheduled Operator....
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....SOP holder. This demand is entirely beyond the allegations made in the show cause notice and has, therefore, to be set aside. Thus, the Commissioner could not have confirmed the aforesaid demand since the appellant had not been put to notice on this allegation in the show cause notice. 22. In this connection reference can be made to the decision of the Supreme Court in SACI Aillied, wherein it was observed: "17. ******It was argued that the first proviso to Section 4(1)(a) of the Act was never invoked by the Department either in the show cause notice or in the impugned order and it was for the first time that the appellate Tribunal in the impugned order has sought to sustain the impugned order by invoking the first proviso to Section 4(1)(a) of the Act. It is thus seen that the Tribunal has gone totally beyond the show cause notice and the order of the Collector, which is impermissible. The appellate Tribunal cannot sustain the case of the Revenue against the appellants on a ground not raised by the Revenue either in the show cause notice or in the order. 18. In this context, we may usefully refer to the judgment of this Court in the case of Reckitt & Colman of....