TaxTMI 
TaxTMI 
2025 (5) TMI 1036
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....e Commissioner that imposes penalty of Rs. 10 lakhs under section 112 read with section 140 of the Customs Act. 3. Customs Appeal No. 421 of 2010 has been filed by J.M. Lal, Chief Executive Officer of the appellant, to assail the order dated 19.05.2010 passed by the Commissioner that imposes penalty of Rs. 10 lakhs under section 112 read with section 140 of the Customs Act. 4. The appellant was granted a no objection certificate to operate Non-Scheduled Air Transport Services (Passenger) and for acquisition of one Piper Seneca IV Aircraft for Non-Scheduled Air Transport Passenger Services on 31.08.2006 by the Ministry of Civil Aviation, Government of India. Subsequently, the Director General of Civil Aviation, Government of India, issued Permit No. 07/2007 dated 24.08.2007 to the appellant to operate Non-Scheduled Air Transport Services (Passenger/Cargo/Charter) with the aircraft listed in Appendix I. The relevant portion of the said permit dated 24.08.2007 is reproduced below: "Permit To Operate Non-Scheduled Air Transport Services (Passenger/Cargo/Charter) Permission is hereby granted to Sky Airways P-3 New C.I.T. Road, (2nd Floor), Kolkata- 700 073 ....
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....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. Description of goods Standard rate Additional duty rate Condition No. (1) (2) (3) (4) (5) (6) 347B 8802(except 8802 60 00) All Goods Nil - 104 xxxxxxxx (B) in the Annexure, after Condition No. 102 and the entries relating thereto, the following Conditions shall be inserted, namely:- xxxxxxxxxx 104. (i) the aircraft are imported by an operator who has been granted approval by the competent a....
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.... notice dated 03.08.2009 was issued to the appellant and the relevant portion is reproduced below: "M/s Gandhmardhan Sponge Industries Private Limited (M/S Sky Airways, a Division of M/s G.S.I. Pvt. Ltd.), (hereinafter called to as "the importer") imported a helicopter Bell 407 Sr. No. 53598 and filed Bill of Entry No. 869994 dated 11.01.2008 with an assessable value Rs.11,84,52,537/- from M/s Hennessy Aviation Services (Ltd) Unit 8 North Wood Court, Santry, Dublin 9, Ireland, under invoice dated 21.12.2007 for its clearance through M/s Parveen Munjal. The Aircraft was described as Bell 407 Helicopter having Sr. No. 53598 (Registration No. VT-TBE). The helicopter's country of origin was declared as Canada. Clearance of helicopter was claimed under Notification No. 21/2002-Cus. Dated 1.3.2002, as amended by Notification No.61/2007-Cus dated 3.5.2007, under serial No.347B at 'nil' rate of duty. M/S Sky Airways (a Division of M/s G.S.I. Pvt. Ltd.) gave an undertaking dated 14.1.2008 to the Assistant Commissioner of Customs, as per the aforesaid notification. They also submitted a NOC to import dated 20.12.2007 issued by DGCA and Permit No. 7/2007 dated 24.08.2007 issued b....
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.... (a division of M/S GSI Private Ltd) through its Director Sh.B.M.Agarwal and C.E.O. Sh. J.M.Lal, have willfully mis-represented and suppressed facts at the time of import of the Aircraft with an intention to evade payment of Customs duties and circumvented relevant laws relating to the import of aircraft. By their above acts of omission and commission Sh. B. M. Agarwal, Director and Sh. J.M.LaL, CEO have rendered themselves for penal action under Section 112(b) of Customs Act, 1962. 25. Now, therefore, the noticees are required to show cause to the Commissioner of Customs (Preventive), Room No. 212; New Custom House, Near IGI Airport, New Delhi, within 30 days of receipt of this notice, as to why- a) The aircraft valued Rs.11,84,52,537/- (c.i.f) should not be confiscated under Sec 111(d), and 111 (0) of the Customs Act, 1962, and appropriate fine should not be imposed, b) The Customs duty amounting to of Rs.3,00,82,889/- should not be demanded under Sec 28 of the Act, ibid., and as to why amount already deposited by them should not be appropriated against the said demand. c) Interest as applicable under Sec 28AB of the Act, ibid, on the duty amou....
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....ted 07.08.08 of Sh. J.M.Lal, CEO of the importer, wherein he has clearly admitted that the helicopter Bell 407 had been given to M/s Trans Bharat Aviation Pvt. Ltd., their sister concern, for charter as there was no business for the operation of Bell 407 at Bhubneshwar. As such, I reject this argument of the importer. 35. In this case the undertaking given as per Customs notification is only to operate non-scheduled (passenger) service and for which importer has not been issuing tickets to individuals. It can not be considered that permission for non-scheduled (passenger) services is automatically valid for running non-scheduled (charter) services when both these services are separately defined under the Customs exemption notification and undertaking is given for use of the aircraft for non-scheduled (passenger) services only. Further the exemption is conditioned to a specific service expressly defined in the Customs notification and the aircraft has to be put to use exclusively for that service and not for both the Services. A flexible interpretation given in the Civil Aviation Rules & Regulations cannot be used for interpreting the provisions of Customs Notifica....
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....ted as the Aircraft has been leased is not correct; and v. The Helicopter could not be held liable to confiscation under section 111 (0) of the Customs Act. 13. Shri Rakesh Kumar, learned authorized representative appearing for the department, however, supported the impugned order and submitted that it does not call for any interference in this appeal. Learned authorized representative submitted that the importer neither provided "Non-Scheduled (Charter) Services" or provided "Non-Scheduled (Passenger) Services". Learned authorized representative also submitted that though the importer complied with clause (i) of Condition No. 104 of the Notification dated 03.05.2007, but violated the mandatory post-import condition contained in clause (ii) of the said Notification. The importer would, therefore, not be eligible for exemption from payment of basic customs duty under the said Notification. 14. The submissions advanced by the learned counsel for the appellant and the learned authorized representative appearing for the department have been considered. 15. The Commissioner has interpreted Condition no. 104 (ii) (a) of the Notification dated 03.05.2007 in a manner that....