AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2023 (12) TMI 1077
X X X X Extracts X X X X
X X X X Extracts X X X X
.... holds a permit issued by the Directorate General of Civil Aviation [DGCA] for undertaking non-scheduled (passenger) services. The appellant also applied to the DGCA for granting the necessary permission to import aircrafts/helicopters and the DGCA granted the no objection certificate for import of aircrafts/helicopters for operating non-scheduled operator services. Permit No. 1/1998 dated 16.01.2006 was issued by the DGCA initially to Ran Air Services Limited and subsequently on change of name of the company, a fresh permit dated 27.03.2009 was issued in the name of Religare Aviation Limited (the appellant). 3. The following aircrafts/helicopters were imported by the appellant but VT-REO at serial no. 4 crashed on 03.08.2008: S. No. Name of the aircrafts/helicopter Registration No. Date 1. 2001 King Air B200 VT-RSM 12.11.2007 2. 2000 King Air B200 VT-REM 12.11.2007 3. Hawker 800 XP VT-RAN 13.11.2007 4. 2000 Bell 430 VT-REO 13.11.2007 5. 1998 King Air B200 VT-RSN 18.03.2008 6. Beechcraft 1900 D VT-REN 19.05.2008 7. Bell 430 VT-RER 22.12.2008 8. Falcon 2000 VT-RVL 08.02.2009 4. The aforesaid aircrafts/helicopters were cleared by the appellant ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....l 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 (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." 6. A perusal of Condition No. 104 would show that at the stage of import, the importer should have an approval from the competent authority in the MCA and the importer should, at the time of importation, also furnish an undertaking to the customs aut....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... one Mr. Sunil Godhwani and Mrs. Dhillon who admittedly are prospective users and have used the aircraft in the future; (v) They were travelling on the flight only for experiencing the aircraft; and (vi) The flight, as is evident from Flight Report Book, shows that it was a flight from Delhi-Raipur-Bagdogra-Delhi and there was no stoppage time at the airports. 9. The Commissioner, however, by order dated 30.09.2010, confirmed the demand after recording the following findings: (i) Non-scheduled passenger services permit does not automatically qualify as non-scheduled charter services permit; (ii) The appellant does not qualify for providing charter services; and (iii) The aircraft VT-RAN for one instance was used on 27.01.2008 without remuneration but aircrafts otherwise were used by Group Companies for consideration resulting in breach of non-scheduled air transport passenger services. 10. Shri Tushar Jarwal, learned counsel for the appellant assisted by Shri Priyojeet Chatterjee and Shri Rahul Sateeja submitted that the aforesaid findings recorded by the Commissioner in the impugned order are not sustainable in view of the decision of the Larger Bench of the Tribunal i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....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. Thus, 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. ***** Non-scheduled (passenger) operator can carry out charter service 62. It would now have to be seen whether there is any restriction or prohibition against providing air transport service by way of charter of aircraft, while providing non-scheduled (passenger) services. 63. As noticed above, the definitions of air transport service and non-scheduled (passenger) service do not stipulate any restriction or impose a condition that such service should be rendered only on per-seat basis and not by chartering nor is there any stipulation in CAR 1999 issued by DGCA for grant of permits to operate non-scheduled air transport (passenger) services. In fact paragraph 9.2 of CAR 1999, which deals with non-scheduled air transport (p....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rcraft to be importer/acquired by the applicant. (b) Non-scheduled operators can conduct charter/non-scheduled operations for transportation by air of persons, mail or goods. In such operations, the operators shall not publish their time schedules as the operations are of non-scheduled nature. 68. It is, therefore, clear that an operator providing non-scheduled (passenger) services can always provide such services either on individual seat basis 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. (emphasis supplied) 14. The Larger Bench also held that personnel of Companies which are Group Companies qualify as members of public and the relevant paragraphs of the decision are reproduced below: Whether the aircraft can be used by members of public 86. The definition of "private aircraft" under rule 3(43) of Aircraft Rules, does not warrant the view that if tariff is not published, the use of aircraft would be private. In terms of rule 3(43), private aircraft is other than public transport aircraft. Public transport aircraft is defined in rule 3 (46) as aircraft w....
X X X X Extracts X X X X
X X X X Extracts X X X X
....supplied) 15. The Larger Bench also held that there is no requirement to issue air tickets and the relevant paragraphs of the decision are as follows: 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) serv....
X X X X Extracts X X X X
X X X X Extracts X X X X
....roduced below: "26. Mr. Harpreet Singh, learned counsel appearing for the Revenue, submits that the present appeal also raises an additional question whether the helicopters imported for non-scheduled (passenger) services could be used for non-scheduled (charter) services. He submits that the said question was not covered by the decision in the case of East India Hotels Ltd. (supra). 27. The said contention is not merited. Although Mr Singh is correct that the said question did not arise in East India Hotels Ltd.(supra), the interpretation of Condition No.104 of the Exemption Notification and the Aircraft Rules, 1937, as accepted by the Court in the said decision, would answer question no. (iii) as well. This is briefly explained hereafter. 28. It is relevant to refer to Condition No.104 of the Exemption Notification and the same is set out below: "104. (i) the aircraft are imported by an operator who has been granted approval 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 Cust....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e' is defined in wide terms and would cover transport by air of humans, animals, mails or any other thing, animate or inanimate. However, for a service to fall within the meaning of air transport service as defined in Rule 3(9) of the Aircraft Rules, it is essential that the same is provided for some kind of remuneration. 33. This Court had also referred to paragraphs 2.4 and 2.5 of the Civil Aviation Requirement (CAR), Section 3, Air Transport Series 'C' Part-III issue-II, dated 01.06.2010 issued by the DGCA. The said paragraphs are set out below: "2.4 The carriage of passengers by a non-scheduled operator's permit holder maybe performed on per seat basis or by way of chartering the whole aircraft on per flight basis, or both. 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 a 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 charters to points outside India may also be undertaken as per paragraph 9.2. 2.5 A non-Scheduled Operator is also allowed to operate r....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on basis, the appellant had not violated Condition No. 104 of the notification and after noticing the provisions paragraph 2.5 of CAR, the Delhi High Court observed as follows: "34. A plain reading of paragraph 2.5 also indicates that its contents are in conformity with the definition of the term 'non-scheduled air transport service', which entails air transport service, for any kind of remuneration. It is clear from paragraph 2.5 that a Non-Scheduled Operator is also allowed to operate revenue charter flights for related entities, its own employees or employees of a group company including Chairman and members of the Board of Directors and their family members. However, it is necessary that such service be provided for remuneration." 19. The issue, therefore, that arises for consideration is whether the appellant had violated Condition No. 104 of the notification merely because on one occasion one aircraft had been used without remuneration. As noted above, in reply to the show cause notice the appellant had pointed out that in regard to the aircraft VT-RAN which was imported on 13.11.2007, the first flight was undertaken on 25.01.2008 and the second flight was undertaken on 27....
X X X X Extracts X X X X
X X X X Extracts X X X X
....2 40,00,00,000 20,45,25,279 25,63,61,735 23. What has to be seen is whether the appellant would be entitled to interest on the redemption fine amount deposited by the appellant, which is now liable to be refunded. 24. Learned counsel for the appellant submitted that though there is no provision for grant of interest on refund of redemption fine, but there is also no provision prohibiting the grant of interest on refund of redemption fine. In this connection, learned counsel for the appellant placed reliance upon the decision of the Supreme Court in Godavari Sugar Mills Limited vs. State of Maharashtra and others [(2011) 2 SCC 439] and on rule 41 of the Customs, Excise and Service Tax Appellate Tribunal (Procedure), Rules 1982. Learned counsel also submitted that the Larger Bench decision of the Tribunal in Advance Mechanical Works vs. Commissioner of Customs & Central Excise, Rajkot [2005 (182) E.L.T. 460 (Tri. - LB)] would not be applicable to the facts of the present case. 25. Learned special counsel appearing for the department, however, submitted that in the absence of any specific provision granting interest on refund of redemption fine, it will not be approp....
X X X X Extracts X X X X
X X X X Extracts X X X X
....in Orient Enterprises held that interest is not payable in the facts of that case. It is important to narrate the facts of Orient Enterprises' case. M/s. Orient Enterprises imported certain goods. The customs authorities did not accept the declared value, enhanced it, confiscated the goods on the charge that the goods were undervalued, allowed it to be redeemed on payment of fine and imposed a penalty. The importer succeeded in appeal. Since the amount deposited by the importer upon adjudication by the Collector was not refunded, the importer approached the Tribunal for issuing directions to the lower authorities. The Tribunal directed the Collector to refund the money to the importer within 60 days period. The Collector refunded the amount. The importer thereupon filed a Writ in the High Court claiming that he is entitled to interest on the amount involved. The High Court disposed off the Writ directing the department to pay interest at 12% from the date of filing of the revision application till the date of payment. The Union of India went in appeal against the order of the High Court. The Supreme Court allowed the appeal and set aside the order of the High Court. 3. The Supre....