TaxTMI 
TaxTMI 
2023 (12) TMI 1077
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.... (passenger) services and for this purpose 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 ....
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....viding 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 (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 ....
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....ker 800 (9-seater) that was imported on 13.11.2007; (ii) The first flight on this aircraft was on 25.01.2008 and the second flight was taken on 27.01.2008; (iii) Since the aircraft was new, the second flight was for crew familiarization; (iv) The flight had two pilots (crew) and 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 breac....
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.... 'Air transport service' has been defined in rule 3 (9) of the Aircraft Rules to mean service for transport by air of persons for any kind of remuneration whatsoever. There is no dispute that the appellants have used the aircraft for the transport of persons for remuneration. There is no stipulation or restriction or a condition in the said 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. 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 an....
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....ft Rules. Both, CAR 1999 that deals with non-scheduled (passenger) services operator and CAR 2000 that deals with non-scheduled (charter) services operator define a non-scheduled air transport services (passenger) in the same manner as defined in clause (b) of the Explanation to Condition No. 104. 67. CAR 1999 contains the following relevant provisions: (a) There will be no restriction on the type and seating capacity of the aircraft 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 q....
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....arned counsel for the appellants submitted that the aircraft is available not only to group companies but also to other customers. 90. In the first instance, personnel of companies which are group companies of the appellant are also members of public. The aircraft is, therefore, available for used by the public. Even otherwise, this cannot be a reason to hold that the air transport service provided by the appellants would fall outside the scope of non-scheduled (passenger) service. (emphasis 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 oth....
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.... Second Schedule. Thus, there cannot be any violation of the conditions, if tickets are not issued. (emphasis supplied) 16. The Larger Bench also held that remunerative flights qualify as a air transport services and would be covered under the exemption. This is clear from paragraph 55 of the order of the Larger Bench, which paragraph has been reproduced above. 17. The Delhi High Court in Global Vectra Helicorp also held that non-scheduled passenger permit can also cover non scheduled charter services and the relevant portion of the judgment is reproduced 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 ....
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....n would be satisfied. 30. The expression 'non-scheduled (passenger) services' is defined to mean 'air transport services other than the scheduled (passenger) air transport services'. 31. The expression 'air transport services' is defined under sub-rule (9) of Rule 3 of the Aircraft Rules, which reads as under: "(9) "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;" 32. In East India Hotels Ltd. (supra), this Court had noted that the term 'air transport service' 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....
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....nts of Condition No.104 of the Exemption Notification are unambiguous but the aforesaid explanation inserted by way of amendment of Condition No.104 of the Exemption Notification amply clarifies that the exemption condition would be satisfied if the aircraft imported is used for non-scheduled (passenger) services or non-scheduled (charter) services." (emphasis supplied) 18. It is not in dispute that the aircrafts were used by Group Companies for consideration, except on one occasion where one aircraft was used without remuneration. The Delhi High Court in East India Hotels clearly held that since the appellant therein had used the aircraft for transporting senior officials of related entity and their family members on remuneration 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....
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.... Fine (in Rs.) Rede -mption fine paid Bank Guarantee 1. VT-RSM Super King Air B200 13,94,28,048 14.76 2,05,78,957 2,05,78,957 1,77,04,975 2. VT-REM Super King Air B200 12,84,82,173 14.76 1,89,51,587 1,89,51,587 1,63,04,879 3. VT-RAN Hawker 800 XP 35,70,04,195 14.76 5,26,92,224 5,26,92,224 4,53,33,423 4. VT-REO Bell 430 24,75,28,275 14.76 3,65,34,064 NA NA 5. VT-RSN Super King Air B200 12,98,49,648 14.76 1,91,65,228 1,91,65,228 1,50,13,025 6. VT-REN Beech 1900 D 14,77,96,739 14.76 2,18,14,138 2,18,14,138 1,70,88,042 7. VT-RER Bell 430 38,39,12,671 14.76 5,66,63,795 5,66,63,795 3,56,61,573 8. VT-RVL Falcon 2000 1,17,61,87,413 14.76 17,36,00,007 NA 10,92,55,818 2,71,01,89,162 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 sub....
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....er allowed the appeal with consequential relief. In that case, the department denied refund of Rs. 61.70 on the ground of limitation after sanctioning a part of Rs. 1 crore deposited by the appellant during investigations. The Tribunal referred to Kuil Fire Works Industries v. Union of India (1997 (95) E.L.T. 3 (SC)] and relied upon Eastern Coils Pvt. Ltd. v. CCE, Calcutta [2003 (153) E.L.T. 290 (Cal.)] and Board's circular dated 2-1-2002 while directing the Revenue to refund the amount due along with interest at the rate of 12%. It can be observed that the Tribunal directed the Revenue to pay interest on the consequential refund not paid, as the department set at naught relief ordered by the Tribunal. It is true that the Tribunal did not have occasion to consider the decisions in Suganmal v. State of Madhya Pradesh [AIR 1965 SC 1740] and UOI v. Orient Enterprises [1998 (99) E.L.T. 193 (SC)]. The Division Bench of the Supreme Court 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....
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....on redemption charges paid in pursuance of an adjudication order which was set aside later, can't be maintained. The present appellant's claim for interest on the redemption fine therefore cannot be upheld. 5. We observe that there is no conflict between the decision in Sheela Foam and Orient Enterprises. The latter was dealing with the interest on redemption fine to be refunded while the former was concerned about interest on deposit of duty. We conclude that no interest is payable on redemption fine and penalty while refunding the same in pursuance of an order of a higher judicial forum as observed by the Supreme Court in Orient Enterprises' case. The case of interest on consequential refund of duty is covered by the decision in Sheela Foam case. There is no conflict between these decisions. We hold accordingly. 6. The appeals themselves are disposed off by holding that the appellants are not entitled to refund in the present case." (emphasis supplied) 27. The issue, therefore, stands settled against the appellant in the aforesaid decision of the Larger Bench of Tribunal in Advance Mechanical Works. The Larger Bench of the Tribunal had placed relianc....