AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2024 (6) TMI 21
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....of the case are that the respondent (GMR) imported Dassault Falcon 2000 Ex Easy ('Aircraft') vide bill of entry no.220450 dated 21.06.2007 availing the exemption under notification no.21/2022-cus dated 01.03.2002, as amended by notification no.61/2007-Cus dated 03.05.2007. The Aircraft was imported under Permit No.6/2007 dated 07.08.2007 issued by the Directorate General Civil Aviation (DGCA), Govt. of India for non-scheduled operator permit [(Passenger) (NSOP) (Passenger)] and the same has been renewed from time to time by the DGCA. 3. On the basis of the investigation initiated by the Revenue, show cause notice dated 21.07.2008 was issued on the ground that the respondent violated Condition No.104 of the Notification No.21/2002 - as the Aircraft was used 'for private purpose' in the case of usage by the group companies and for charter purpose in case of used by other entities other than group companies. As the Aircraft has not been used for NSOP (Passenger), it was proposed, to confiscate the aircraft under Section 111(d) and (o) to demand differential duty under Section 28 of the Customs Act, 1962 along with penalty. On adjudication, the demand of differential duty was dropped ....
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....charter operations and the same would fall within the non-scheduled (Passenger) permit holders. Referring to para-3 of CAR, 2000, the learned counsel submitted that the issuance of passenger ticket is not a requirement to fulfil the conditions of the exemption notification. While pointing out that the aircraft is not a private aircraft, it was submitted that the aircraft is available not only to group companies but also to other customers. Relying on the observations of the Larger Bench in M/s.V.R.L. Logistics, learned counsel has taken us to the statement made by the Hon'ble Finance Minister, on the basis whereof notification no.61/2007 was issued and therefore, exemption notification needs to be interpreted keeping in view the purpose for which it was introduced. Learned counsel for the respondent referred to series of decisions, which have been subsequently passed following the decision of the Larger Bench in M/s.V.R.L. Logistics, which are as under:- (i) M/s.Reliance Commercial Dealers Ltd. Vs. Commissioner of Customs (Preventive), New Customs House, Delhi 2022 (9) TMI 807 -CESTAT New Delhi affirmed by the Hon'ble High Court 2023(3)TMI 595 - Delhi High Court (ii) M/s.Globa....
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....erations 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." Civil Aviation Requirements, 2000 CAR, 2000 "Definition For the purpose of this CAR, the following definitions shall be followed: Non-Scheduled air transport services (Passenger) means air transport services other than scheduled air transport services as defined in the Rule 3 of the Aircraft Rules, 1937. Charter Operation is an operation for hire and reward in which the departure time, departure location and arrival locations are specially negotiated with the customer or the customer's representative for entire aircraft no ticket is sold to individual passenger for such operation." 9. We agree with the submissions of the learned counsel for the respondent that the issue is no longer res integra and all the issues have been considered in depth by the Larger Bench of the Tribunal in M/s.V.R.L. Logistics and we do not find any reasons to differ from the same. Larger Bench had specifically framed the questions whether the conditions mentioned at Sl.No.104 of the notification no.21/20....
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....cheduled operations. 71. In this view of the matter, the contention of the learned special counsel for the department that a charter permit is required for carrying out charter operations cannot be accepted. In fact, the prohibition is on a nonscheduled (charter) holder to carry out (passenger) operations. 72. This issue can be examined from another aspect. A comparison of the definition of non-scheduled (passenger) services with non-scheduled (charter) services would show that while non-scheduled (passenger) services are of much wider category, non-scheduled (charter) services are of limited nature applicable only to small aircrafts and restricted to operators registered under the nonscheduled (charter) category. What needs to be noticed is that the exemption is available to both non-scheduled (passenger) services and nonscheduled (charter) service and neither the exemption notification nor the Aircraft Rules or Civil Aviation Requirements excludes charter operations from the ambit of non-scheduled (passenger) services." 11. On the question of issuance of passenger tickets, the Larger Bench in M/s.V.R.L. Logistics considered the same and observed as under:- "103. In any ....
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....e aircraft to be used by the Chairman, Directors of various group companies, their VIP guests and relatives. In terms thereof, the respondent allowed fixed number of flying hours to each group companies, against certain fixed charges plus operating charges and for which, it raised supplementary invoice on monthly basis to each of its group companies. The aircraft was used not only to cater the requirement of GMR group of companies, but for charting the same to utilise spare capacity. The aircraft has been used for passenger or charter service to other companies like HPCL, Punj Lloyd, MICO depending on availability of the aircraft and its utilisation was not restricted to the group companies. Lately, the Time Share Agreement was done away with and the aircraft has been provided on first come first basis and is advertised on the web and other modes. All the flights are billed as the group companies are also charged as per the tariff on purely commercial terms which stands proved by the fact that the respondent have discharged the service tax on the value of services received from these companies. It is also relevant to take note of the observations of the Larger Bench that personnel ....
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....assenger) granted to the appellant. Taking similar clarification issued by DGCA, the Larger Bench in M/s.V.R.L. Logistics , specifically noted - "DGCA has, therefore, unequivocally clarified that a nonscheduled (Passenger) Permit holder can conduct charter operations." 16. We may deal with the decision cited by the learned Special Counsel for the Revenue in the case of M/s. East India Hotels Ltd., where the key question before the High Court was whether non-revenue flight operated by the companies for transporting its official would fall within the scope of providing non-scheduled (Passenger) service or non-scheduled charter service in terms of the notification in question. Referring to the Aircraft Rules, specially Rule 3(4) defining "Scheduled Air Transport Services" and Rule 3(9) defining "Air Transport Service", the Court observed as under : - "31. A plain reading of Rule 3(9) of the Air Craft Rules, indicates that the term 'air transport service' is defined in wide terms and would cover transport by air of humans, animals, mails or any other things, animate or inanimate. However, it is necessary that the said service be provided for 'remuneration'. The said definition al....