TaxTMI 
TaxTMI 
TaxTMI 
2025 (11) TMI 1651
X X X X Extracts X X X X
X X X X Extracts X X X X
.... an option to the appellant to redeem the same on payment of redemption fine. 2. The appellant, formerly known as Bhaskar Essoils Pvt. Ltd., was in the business of scheduled/non-scheduled air taxi services and was organizing charter and group tours in India and abroad. 3. The appellant was initially granted a No Objection Certificate by the Ministry of Civil Aviation on 04.08.2008 to operate Non-Scheduled (Passenger) Operations [NSOP], which certificate was valid upto 03.02.2010. The No Objection Certificate was subsequently extended again on 28.06.2010 and was valid upto 01.02.2011. 4. On 28.07.2010, the Directorate General of Civil Aviation [DGCA] granted the appellant a No Objection Certificate to import Learjet 60XR (MSN 60-0384) Aircraft subject to compliance of the civil aviation requirements and other regulatory mandates by the DGCA. 5. On 11.12.2010, the appellant furnished an undertaking to the Assistant Commissioner of Customs stating that the imported Aircraft and its spare parts would be used exclusively for non-scheduled air transport services. 6. Pursuant to this, the appellant filed a Bill of Entry on 19.12.2010 and imported the Aircraft and its parts ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tice and denied the allegations made therein. 12. The Additional Director General, however, did not accept the submissions made by the appellant and confirmed the demand raised in the show cause notice. The relevant portions of the order are as follows: "5.4.12 In terms of the CAR dated 01.06.2010, a Non-Scheduled Operator shall issue passenger tickets in accordance with the provisions of the Carriage by Air Act, 1972 and any other requirements which may be prescribed by DGCA and such tickets shall stipulate the conditions of carriage including the liability of the operator which shall be same as applicable to the Scheduled Air Transport Operators. In case of charter operation, a single document issued to the party chartering the flight containing all conditions may be treated as fulfilling this requirement. However, in this case, admittedly, they have not issued individual tickets to the passengers. Further, they have also neither issued any document containing all conditions stipulated under individual tickets as prescribed by the CAR, 2010 nor have they published a tariff for the Aircraft as is the requirement for charter. Hence, they have not conformed to the provis....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ation No. 21/2002-Cus., as amended by Notification No. 61/2007-Cus; (ii) The appellant had provided Air Transport Service which was a non-scheduled (passenger) service as per Condition No. 104 of the Exemption Notification and rule 3(49) of the Aircraft Rules; (iii) As per the CAR 2010, Non-Scheduled (Passenger) Services can also provide Charter services. Subsequently, now both the services together have been termed as Non-Scheduled Air Transport Services and hence, the appellant also conformed to the requirements under CAR; (iv) Not issuing tickets is not violative of the CAR 2010 and thereby the use of the impugned Aircraft was well within the ambit of Non-scheduled Air Transport (Charter) services; (v) The appellant met the criterion of being "dedicated" to air charter operations, as is clear from the Memorandum of Association and Articles of Association of the appellant. They demonstrate that one of the principal objectives of the company is the operation of air transport services; (vi) There is no bar under law that could prevent the appellant from operating non-scheduled air transport services for its group companies, provided such....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e the appellant did not issue individual tickets to the passengers and hence the appellant had not conformed to the provisions of the non-scheduled air transport service either as passenger or charter. The Additional Director General also observed that the appellant had not provided the said Aircraft for public transport of passengers, since it was mostly used by the top management of Dainik Bhaskar Group and their families. The Additional Director General, therefore, concluded that the appellant had violated the terms of the Exemption Notification and so would have to pay customs duty. In regard to the invocation of the extended period of limitation under section 28(4) of the Customs Act, the Additional Director General held that the appellant had evaded due customs duty by making willful mis-statement and suppression of facts. 18. The Delhi High Court in Commissioner of Customs (Preventive), New Delhi vs. Global Vectra Helicorp Ltd.[(2023) 25 GSTR-OL 237], after referring to the provisions of CAR 2010, observed that a non-scheduled operation is allowed to also operate revenue charter flights for related entities. The relevant portions of the judgment are reproduced below: ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....if provided for passengers. 36. It is also material to note that the Exemption Notification was further amended by Notification No. 21/2011-Cus dated 1-3-2011 and the following explanation has been added to Condition No. 104 of the Exemption Notification: "2. For the purposes of this exemption, use of such imported aircraft by a non-scheduled (passenger) operator for non-scheduled (charter) services or by a non-scheduled (charter) operator for non-scheduled (passenger) services, shall not be construed to be a violation of the conditions of import at concessional rate of duty." 37. Although, the requirements 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) 19. A Larger Bench of the Tribunal in VRL Logistics vs. Commissioner of Customs [Customs Appeal No. 74 of 2010 decided on 08.08.2022] held that non-scheduled (passenger)....
X X X X Extracts X X X X
X X X X Extracts X X X X
....maceuticals Company vs. Collector of Central Excise, Bombay [1995 (78) E.L.T. 401 (S.C.)]. The Supreme Court observed that section 11A(4) empowers the department to reopen the proceedings if levy has been short levied or not levied within six months from the relevant date but the proviso carves out an exception and permits the authority to exercise this power within five years from the relevant date in the circumstances mentioned in the proviso, one of it being suppression of facts. It is in this context that the Supreme Court observed that the act must be deliberate to escape payment of duty. The relevant observations are: "2. *****. The Department invoked extended period of limitation of five years as according to it the duty was short levied due to suppression of the fact that if the turnover was clubbed then it exceeded Rupees Five lakhs. ***** 4. A perusal of the proviso indicates that it has been used in company of such strong works as fraud, collusion or willful default. In fact it is the mildest expression used in the proviso. Yet the surroundings in which it has been used it has to be construed strictly. It does not mean any omission. The act mus....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... by the Supreme Court in Uniworth Textiles Ltd. versus Commissioner of Central Excise, Raipur [2013 (288) E.L.T. 161 (S.C.)] and the relevant portion of the judgment is reproduced below: "12. We have heard both sides, Mr. R.P. Batt, learned senior counsel, appearing on behalf of the appellant, and Mr. Mukul Gupta, learned senior counsel appearing on behalf of the Revenue. We are not convinced by the reasoning of the Tribunal. The conclusion that mere non-payment of duties is equivalent to collusion or willful misstatement or suppression of facts is, in our opinion, untenable. If that were to be true, we fail to understand which form of nonpayment would amount to ordinary default? Construing mere non-payment as any of the three categories contemplated by the proviso would leave no situation for which, a limitation period of six months may apply. In our opinion, the main body of the Section, in fact, contemplates ordinary default in payment of duties and leaves cases of collusion or wilful misstatement or suppression of facts, a smaller, specific and more serious niche, to the proviso. Therefore, something more must be shown to construe the acts of the appellant as fit for t....