TaxTMI 
TaxTMI 
2026 (1) TMI 798
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....raft under the terms of this Notification and, therefore, HAL has short -paid the duty including Integrated Goods and Service Tax (IGST). Consequently, show cause notices dated 20.06.2022 and 03.02.2023 were issued. 2. On adjudication, common Order-in-Original dated 21.07.2023 [No.05 & 06/2023-24/C.J./Principal Commissioner dated 21.07.2023] whereby the demand of differential customs duty of INR. 92,81,577 has been confirmed against the Appellant by invoking extended period of limitation under Section 28(4) of the Customs Act. 1962 [Act, 1962] along with interest under Section 28AA of the Act and penalty of equivalent amount under Section 114A of the Act for the period July 2017 to March 2022 ("relevant period") on the ground that exemption under Sl. No. 545 of Notification No. 50/2017 dated 30.06.2017 is not applicable to the goods imported by the Appellant i.e. fire extinguishers and its parts as they are not part of aircrafts. Further, the demand to the extent of INR. 6.75,708/- has been confirmed on the ground that the Appellant have short paid Integrated Goods and Service Tax Act, 2017 ('IGST Act') for the period July 01. 2017 to November 13, 2017.Hence, the present....
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....t No. 30300025 is an essential safety equipment for defense aircrafts such as DO-228 without which the aircrafts will not be able to fly. Thus, for aircrafts to actually fly and carry out any defense operations such as border security, surveillance, these goods are essential. Since these fire extinguishers are specially designed, they cannot be used elsewhere and are also not locally available. 10. Further, the fire extinguishers i.e.. Part No. UBSHI-6-2 are used in Su30MK1 aircraft. These are engine fire extinguisher system and is a spherical bottle with two valve cartridge-actuated valves which is located in the central compartment of the bottom part of the fuselage Le, near the engine of Su30MKI aircraft. The imported goods are round in shape, charged with CHLADONE and cartridges are installed on the container with pressure gauges. The engine fire extinguishing system is fitted in aircraft as a safety device used to prevent engine fire, thus saving the aircraft and the pilot in the event of fire onboard. The imported fire extinguisher operates by deploying the fire extinguishing agent into the pipes which are spread across the engine and douses the fire while the aircra....
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....piece or portion of a whole. Further component has been defined as one of the parts of a sub-assembly or assembly of which a manufactured product is made up and into which it may resolve. In the light of the said facts, it was averred that the appellant firm has incorrectly availed the benefit of Notification No.50/2017-Cus on Fire Extinguishers and parts of Fire Extinguishers as they were not part of Aircrafts. The duty so short paid by irregular availment of Sr. No.545 of Notification No.50/2017-Cus is correctly held liable to be recovered from the appellant firm. Revenue has also relied on the decision of the Apex Court in the case of CC, Vs. Dilip Kumar & Company [2018 (362) ELT 866] laying down the parameters of the interpretation of the exemption notification. 5. We have considered the submissions made by both the parties and perused the records of the case. From the impugned order, we find that the Commissioner has agreed with the plea of the appellant that exemption has been granted to all parts of aircrafts of heading "8802" falling under any Chapter of the Tariff. Secondly, while considering the main question whether 'Fire Extinguisher' is a part of aircraft falling....
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....cisions cited by the learned Counsel for the appellant as under:- (i) In MAK Controls v. Commissioner of Central Excise, Coimbatore [2001 (138) E.L.T. 1152 (Tri. - Chennai)] with respect to aircraft parts. it was held that Ground Power Unit being specifically designed and exclusively used in the aircrafts to keep the aircraft in the functional condition of readiness for taking off is to be considered as a part of the aircraft. The equipment was so designed that it could be fitted only to the aircraft and perform the function of servicing aircraft alone and cannot be used elsewhere. The relevant portion of the decision is extracted below: "55. This brings us to the interesting preposition that can a unit capable of rendering such a 'service to the aircraft be called its part It is not disputed that the word "part" is not to be limited to connote only a mere bolt or washer or tyre or hinge - Le a primary function article. Even a component or a sub-system can be a part of the full system. An aircraft is a complicated system - partly mechanical, partly electrical, partly electronic and partly aerodynamical. The GPU, as an auxillary power system, as discussed above....
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....e in its sense, granting benefit to parts of aircraft and helicopter falling under any chapter heading of the first or second schedule of the tariff". (iv) The Apex Court in the case of Commissioner v. Hyundai Unitech Electrical Transmission Ltd. [2015 (323) E.LT. 220 (SCO)] considered the issue whether doors of wind operated electricity generator can be called as part of wind operated electricity generator. The Department had contended that doors are not important for the functioning of the electricity generator and hence cannot be called as part. The Hon'ble Court held that even though the door is a safety device, it is an essential part of the electricity generator as it prevents reptiles, insects from entering the generator in following terms: "6. ......... It is not in dispute that as far as windmill doors or tower doors are concerned, it is a safety device which is used as security for high voltage equipment's fitted inside the tower, preventing unauthorised access and preventing entries of reptiles, insects, etc.. inside the tower. This, according to us, would be sufficient to make it part of the electricity generator.......... ...........Furth....