2023 (4) TMI 514

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....lved in the present appeal relates to the compliance of Condition No.104 of the Exemption Notification No.21/202-Cus dated 01.03.2002 as amended by Notification No.61/07-Cus dated 03.05.2007 (hereafter the 'Exemption Notification'). 5. The Commissioner of Customs (Preventive) had issued a show cause notice dated 06.08.2008 in respect of three helicopters, which were imported by the respondent by availing the benefit of the Exemption Notification. It was, inter alia, alleged in the said show cause notice that the helicopters (Registration No.VT-AZV and Registration No.VT-AZU) were imported for 'non-scheduled air transport (passenger) service'; however, the said helicopters were not used for the said purpose. It was alleged that the respondent has not complied with the Civil Aviation Requirement, Section 3, Air Transport Service 'C', Part 3 dated 08.10.1999, which requires the non-scheduled operators to issue passenger tickets in accordance with the provisions of Carriage by Air Act, 1972. It was further alleged that the respondent had charged fixed monthly charges for the period August, 2007 to January, 2008 from M/s Vectra Aviation Pvt. Ltd. (hereafter 'Vectra') - a group compan....

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....ot used for providing non-scheduled (passenger) air transport services and non-filing of passenger manifest did not constitute violation of any of the provisions of the Customs Act. 11. In regard to the use of helicopter bearing Registration No. VT-AZX for operations by Oil and Natural Gas Corporation Limited (hereafter 'ONGC'), the Adjudicating Authority held that the long term contracts would fall within the purview of Charter Operations and, accordingly, there was no violation of the Exemption Notification on account of the use of the said aircraft for operations by ONGC. 12. The respondent filed an appeal against the Adjudicating Authority to the extent that it confirmed the demand of custom duty in respect of helicopters bearing Registration Signs VT-AZU and VT-AZV; imposed penalty of Rs.5,00,00,000/-; and, levied a redemption fine of Rs.5,00,00,000/- under Section 125 of the Customs Act. 13. The Revenue also filed an appeal in respect of the findings of the Adjudicating Authority, which were in favour of the respondent. 14. The Tribunal allowed the appeal filed by the respondent and rejected the cross-objection filed by the Revenue. The Tribunal also rejected the ....

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....uch an allegation was not made in the show cause notice. The show cause notice had been issued to the appellant alleging that the Helicopters were not being used for NSOP (passenger) purposes as the appellant had entered into various long-term contracts which amounted to a "lease". These allegations were rebutted by the appellant by establishing that no Helicopter was hired exclusively to any one party. The Commissioner agreed with the contention of the appellant that the Helicopters were not leased out to any party and, in any event, a wet lease was permitted. However, the demand was confirmed by the Commissioner on a completely new ground that the appellant had in fact transferred its NSOP to a group company, VAPL, who was not a NSOP 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. *** *** *** 24. Thus, for the aforesaid reasons, the confirmation of demand by the Commissioner against the appellant for the two Helicopters AZU and AZV....

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....venue are concerned, the same are covered by an earlier decision of this Court in East India Hotels Ltd. v. Commissioner of Customs, Central Excise and Central GST, New Delhi: CUSAA 5/2020 decided on 31.01.2023. 22. Question no. (i), as projected by the Revenue, relates to the following conclusion of the learned Tribunal, which in turn is based on the order dated 08.08.2022 passed by the larger bench of the Tribunal: "(vi). The Customs Authorities can take action on the basis of the undertaking submitted by the importer only when the DGCA holds that the conditions of the permit issued by them have been violated; and" 23. The aforesaid issue [question (i) as projected by the revenue] is covered in favour of the Revenue. In East India Hotels Ltd (supra), this Court had held that it would be open for the Custom Authorities to examine whether the conditions of the Exemption Notification are satisfied. The Court further held that the Custom Authorities would not be bound by the decision of the Director General of Civil Aviation (DGCA) in this regard and it is not necessary that the permit granted to the operator be cancelled by the DGCA for the Custom Authorities to take ....

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.... 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' mean services provided by a 'non-scheduled (charter) air transport operator', for charter or hire of an aircraft to any person, with published tariff, and who is registered with and approved by 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." 29. It is clear from a plain reading of the aforesaid Condition of the Exemption Notification that the exemption from custom duties would be available in respect of an aircraft used for providing non-scheduled (passenger) services or non-scheduled (charter) services. Accordingly, if the aircraft is used....