TaxTMI 
TaxTMI 
2026 (2) TMI 136
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....ction 111(o) of the Customs Act, 1962 [the Customs Act] but an option has been given to the appellant to redeem the same on payment of redemption fine. The order also confirms the demand of duty in terms of the undertaking dated 18.10.2007 given by the appellant. 2. Customs Appeal No. 72 of 2010 has been filed by Bhaijayant Panda, Vice Chaiman of the appellant, to assail that portion of the order dated 24.11.2009 passed by the Commissioner that imposes a penalty of Rs. 10 lacs upon him under section 112(a) of the Customs Act. 3. Customs Appeal No. 73 of 2010 has been filed by Rajeev Lala, Senior Managar (Corporate affairs) of the appellant, for assailing that portion of the order dated 24.11.2009 passed by the Commissioner that imposes a penalty of Rs. 2 lacs upon him under section 112 of the Customs Act. 4. Customs Appeal No. 102 of 2010 has been filed by the department to assail that portion of the order dated 24.11.2009 passed by the Commissioner with a prayer that the matter be remanded to the Commissioner for the purpose of enhancing penalty imposed upon Bansidhar Panda, Executive Chairman of the appellant and Baijayant Panda, Vice Chaiman of the appellant. 5. The ....
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....d 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) "347A 8802(except 8802 60 00) All Goods Nil - 103 347B 8802(except 8802 60 00) All Goods Nil - 104 347C Any Chapter Parts (other than rubber tyres or tubes) of aircraft of heading 8802 Nil - 105"; xxxxxxxx (B) in the Annexure, after Condition No. 102 and the entries relating thereto, the following Conditions shall be inserted, namely:- xxxxxxxxxx Condition No. Conditions 103. If,- (a) the aircraft is imported by:- (i) the Aero Club of India, New Delhi, recognized as a National Sports Federation by Ministry of Youth Affairs and Sports, Gover....
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....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 the above purposes." 10. A perusal of Condition No. 104 would show that at the stage of import, the importer should have an approval from the competent authority in the MCA and the importer should, at the time of importation, also furnish an undertaking to the customs authority that the aircraft will be used for the specified services, namely non-scheduled (passenger) services or non-scheduled (charter) services. The undertaking should also state that the importer shall pay on demand, the duty payable, in the event of his failure to use the imported aircraft for the specified purpose. 11. On the date of filing of the said Bill of Entry, the Exemption Notification had come into force. As noticed above the Exemption Notification inserted Serial Numbers 347A, 347B and 347C in the Exemption Notification. Exemption, under the said Serial Numbers 347A, 347B and 347C, was subject to fulfillment of Conditions Nos. 103A, 104....
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....06 read with Import Licensing Note (1) and (2) of Chapter 88 of ITC (HS) for 2004-09, the import of aircraft is restricted. However, an aircraft may be imported only by a person who has been granted permission by the Ministry of Civil Aviation for operating scheduled or non-scheduled air transport services subject to condition that its use is in accordance with the permission. THe use of the subject aircraft is not according to the permission granted by Ministry of Civil Aviation and its import is unauthorized and hence liable to confiscation under Section 111(d) and (o) of the Customs Act, 1962. xxxxxxxxxxxx 30. Thus, from the foregoing paras, it is evident that M/S IMFA have willfully mis-represented and suppressed facts through Rajeev Lala, Sr. Manager, who had signed the undertaking on behalf of M/s IMFA, with an intention to evade payment of Customs duties and circumvented relevant laws relating to the import of helicopter and their parts as such a gross misuse of helicopter for private use instead of specified use, declared at the time of importation and have evaded the Customs duty amounting to Rs. 48,58,948/- (RUD- 9A & 9B) by reason of willful mis-declara....
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....B is a minor mistake is not acceptable. The aircraft importer has promptly paid the entire duty with respect to the aircraft as well as the imported parts for the said aircraft as per facts stated in Para 9 to 15 above. 26. xxxxxxxxxx. It has been argued by the aircraft importer that the aircraft was used by their officials because otherwise the aircraft would have remained idle and instead of requisitioning the services of any other NSOP agency their officials chose to use their own helicopter. Aircraft importer has used the imported aircraft simply as per their own whims and fancies without a scant regard to the law and procedures. In view of their own admissions the aircraft importer has violated the conditions of permit given by DGCA and the condition of the Customs exemption notification. However as already discussed the aircraft importer has not given any undertaking with respect to condition of S. No. 347 B of the Customs exemption notification at the time of importation and the undertaking was given with respect to Sl. No. 347A of the exemption notification. No revised undertaking was given to the department by the aircraft importer. In view of the above findings a....
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.... for charter operations when approval of DGCA is for passenger services in which of the specific conditions of notification No. 21/02-Cus, as amended. For this purpose the importer is required to give an undertaking as per Sr.No.347B of the exemption notification at the time of import which has not been done in this case. For the above violations Robinson R-44 Raven II helicopter valued at Rs. 1,77,34,654/- is required to be confiscation under Section 111(o) of the CA, 1962 and duty is required to be confirmed. As the spare parts are not available for confiscation the same can not be confiscated. 29. So far as imposition of penalty upon Shri Rajeev Lala Sr. Manager of the aircraft importer is concerned it is observed that he gave an undertaking before the Customs for the use of aircraft as per Sr. No. 347 A of the exemption notification No. 21/2002-Cus, as amended. Later he claimed it to be an error and claimed the real Sr. No. should be 347B of this exemption notification. The use of the aircraft was neither as per Sl. No. 347 A nor Sl. No. 347B of the exemption notification. The imported aircraft was used at will without appreciating the provisions of the exemption notif....
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....apparent that it is by mistake that at Serial Number 3 of the undertaking the appellant mentioned that it shall pay on demand the tariff as per Serial Number 347A of the Exemption Notification. It is clear from the undertaking that the appellant had intended to give the undertaking under Serial Number 347B of the Exemption Notification with Condition No. 104 and not 347A of the Exemption Notification with Condition No. 103. Serial No. 103 of the Exemption Notification is in connection with the aircraft imported by the Aero Club of India recognized as a National Sports Federation by Ministry of Youth Affairs or a Flying Training Institute approved by the competent authority in the MCA. The appellant does not satisfy either of the two conditions. On the other hand Serial No. 104 of the Exemption Notification relates to an aircraft imported by an operator who has been granted approval by the competent authority in the MCA to import aircraft for providing non-scheduled (passenger) services or non-scheduled (charter) services. Serial No. 347A relates to Condition No. 103 while Serial No. 347B relates to Condition No. 104. The Commissioner, therefore, committed an error in not accepting ....
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.... Chairman and the officials of the appellant, who frequently travelled to various destinations. Admittedly, the flights operated by the appellant were non-revenue flights. According to the appellant, such non-revenue flights - that is, flights operated without generating revenue - were also covered under the broad definition of non-scheduled (passenger) services. 27. The key question to be addressed is whether non-revenue flights, operated by a company for transporting its officials, would fall within the scope of providing non-scheduled (passenger) services or non-scheduled (charter) services within the meaning of those terms under the Notification. In terms of explanation (b) to Condition no. 104 of the Notification, the term non-scheduled (passenger) services is defined to mean air transport service other than 'scheduled (passenger) air transport service' as defined in Rule 3 of the Aircraft Rules, 1937 (hereinafter 'the Aircraft Rules'). It is, thus, necessary to refer to the Aircraft Rules. 28. Rule 3(49) of the Aircraft Rules defines the scheduled air transport service and is set out below:- "(49) Scheduled air transport service" means an air transp....
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....sued by the DGCA. It is possible that the permit issued by the DGCA to the appellant entitles the appellant to use the aircraft for the aforesaid purposes. The only question that this Court is concerned with is whether the appellant has complied with the conditions as set out in the Notification and is entitled to duty exemption in terms of the Notification in respect of the import of the aircraft. And, as stated above, we find that the appellant has not complied with the condition of using the aircraft solely for providing non-scheduled (passenger) services." (emphasis supplied) 23. In the present case, it is seen from the aircraft log book details that leaving aside test/ferry flights, about 80% of the hours flown by the Helicopter were used by the appellant for private purpose without any remuneration earned from such flights. Only 20% of the flight hours were used for charter purpose, but the reaming 80% of the hours flown by the Helicopter were used by the appellant for private purposes without any remuneration earned from such flights. There is, therefore, no substantial compliance of Condition No.104 of the Exemption Notification. The appellant has, therefore, clearly ....
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.... to do any act ...." would cover acts done or omitted to be done on account of instigation and/or encouragement without knowledge. However, the first portion of Section 112(a) of the Act is only to make person of first degree in relation to the act or omission strictly liable. Persons who are not directly involved in the act or omission to act, which has led the goods becoming liable for confiscation cannot be made liable unless some knowledge is attributed to them. Therefore, it is to cover such cases that Section 112(a) of the Act also includes a person who abets the act or omission to act which has rendered the goods liable to confiscation. Imposing penalty upon an abettor without any mens rea on his part would bring all business to a halt as even innocent facilitation provided by a person which has made possible the act or omission to act possible could result in imposing of penalty. To illustrate innocent transferee of a license which enabled the purchaser of the license to misuse the license could be imposed with penalty. This could never be the intent or objective of Section 112(a) of the Act." (emphasis supplied) 30. The impugned order does not state that the....